GST Council cuts rates on 177 items; chocolates, shampoo to attract 18% tax

Ahead of the meet, Bihar Deputy Chief Minister and GST member Sushil Kumar Modi on Wednesday said that out of 227 items falling in highest tax slab is likely to be reduced from 28 percent to 18 percent.
The GST Council today decided to keep only 50 items, mostly demerit, sin and luxury goods in top 28 percent tax bracket. "Lower 18 per cent GST will be levied on chewing gums, chocolates, aftershave, deodorant, washing powder, detergent, marble," Bihar Deputy Chief Minister Sushil Modi said. The all-powerful council pruned the list of items attracting the top 28 percent tax rate to just 50 from 227 previously, Modi told reporters here. In effect, the council cut rates on 177 goods.

"There were 227 items in the 28 percent slab. The fitment committee had recommended that it should be pruned to 62 items. But the GST Council has further pruned 12 more items," Modi said. He said all types of chewing gum, chocolates, preparation for facial make-up, shaving and after-shave items, shampoo deodorants, washing powder detergent and granite and marble will attract lower 18 percent tax rate.

"There was unanimity that in 28 percent category there should be only sin and demerit goods. So, today the GST Council took a historic decision, that in the 28 percent slab there will be only 50 items and the remaining items have been brought down to 18 percent," he said.

Paints and cement have been retained in the 28 percent tax bracket. "Luxury goods like washing machines and air conditioners have been retained at 28 percent," Modi said. The decision taken by the GST Council will have a revenue implication of Rs 20,000 crore annually. "There is a consensus that lowly 28 per cent slab should be brought to 18 percent. But it will take some time because it has a big revenue implication," he said.

The decision was taken in 23rd GST meet, which is currently underway, in Guwahati, Assam.

Ahead of the meet, Bihar Deputy Chief Minister and GST member Sushil Kumar Modi on Wednesday said that out of 227 items falling in highest tax slab is likely to be reduced from 28 percent to 18 percent. "The GST fitment committee has also recommended reducing tax rates from 18 percent to 12 percent on a number of goods," Modi had said.