Starting from Shampoo Until Handmade Furniture May Get Cheaper Soon

Sushil Kumar Modi

Sushil Kumar Modi

Finance ministers of 24 states have confirmed their participation.

Ahead of the meeting, Bihar Finance minister Sushil Modi, who is also part of the GST Council, hinted at the likelihood of several items in the top GST rate slab being brought under the 18 per cent tax rate.

Watch accompanying video of CNBC-TV18's Timsy Jaipuria and Mangalam Maloo for more details. "The GST fitment committee has also recommended reducing tax rates from 18 per cent to 12 per cent on a number of goods", Modi said. "There is a need for harmonisation of items chapter wise and wherever we find there is a big burden on small and medium businesses and on common man, if we bring them down, there will be a better compliance".

"Small States may have legitimate concerns, but the restriction on inter-State supplies by businesses under the Composition Scheme could also fuel the prospects for more informal trade outside the tax net", an official said, adding that States have in any case been assured of compensation for revenue losses for the first five years of the GST regime. At present, while manufacturers pay GST at 2 per cent, the rate for restaurants is 5 per cent. Traders now pay 1 per cent. The GST Council has been meeting every month since the Goods and Services Tax (GST) regime came into effect on July1. The aim is also to simplify the GST return filing system. The proposal comes in the backdrop of consumer complaints that some retailers charge the new indirect tax on MRP of products.

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After the protests outside the hotel venue, some Congress leaders including Puducherry Chief Minister V. Narayanasamy, Punjab Finance Minister Manpreet Singh Badal and Karnataka Agriculture Minister Krishna Byre Gowda addressed a press conference where they claimed revenue collection in the states had been impacted with the implementation of GST.

The various items that may become cheaper in the near future include wooden furniture, plastic products, toilet and bath accessories, shampoo, etc.

The Council may support merchants and customers involved in digital transactions with certain incentives so as to discourage cash payments and promote a less cash economy being promoted by the incumbent Modi government.

Additionally, a reduction in late filing fees to Rs 50 per day, against Rs 200 at present may also be considered.

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