The Finance Minister Arun Jaitley-headed GST Council will again meet on July 18 to take stock of the preparedness of the new tax system that promises to stitch together a common national market.
In significant decision, the council also raised the eligibility threshold level of the “composition scheme” — to an annual turnover of Rs 75 lakh from Rs 50 lakh earlier, Jaitley said on Sunday after the council’s meeting.
The council also announced a two-part entertainment tax for cinema. Movie tickets costing Rs 100 or below will attract a GST rate of 18 percent, while those priced at above Rs 100 will be taxed at 28 percent, as opposed to standard 28 percent tax across tickets of all values earlier.
“We had received 133 representations from industry,” Jaitley said.
Under the Composition Scheme under GST, a taxpayer will be required to file summarized returns on a quarterly basis, instead of three monthly returns.
Tax on cutlery will come down from 18 to 12 per cent, while computer printers will be lowered from 28 to 18 per cent. Insulin and agarbatti will go down from 12 to 5 per cent.
Among other goods, Jaitley said school bags have been lowered from 28 to 18 per cent, while exercise books will come down from 18 to 12 per cent.
All goods and services under the pan-India GST regime, which will subsume the existing multiple central and state levies, have been categorised in four tax slabs of 5, 12, 18 and 28 per cent, besides those items that attract zero tax.
On Entertainment Tax, Jaitley said that following representations from the film industry, the GST Council has decided on a two-slab structure for cinema tickets, whereby those costing less than Rs 100 would be taxed less at 18 per cent, while those above will attract tax of 28 per cent.
In order to encourage job work outsourcing in sectors like diamond, leather, textiles, jewellery and printing, where workers take the work home, the GST rate has been reduced to 5 per cent.
Besides, traders, manufacturers and restaurants with turnover of up to Rs 75 lakh can avail themselves of the composition scheme, against Rs 50 lakh earlier, Jaitley said.
He also said that lottery tickets and e-way bill are two specific issues that will be taken up at the next meeting of the council here on June 18.
While BJP-ruled states gave a go ahead to July 1 roll-out of the GST, West Bengal Finance Minister Amit Mitra continued to raise serious doubts over the feasibility of the new indirect tax regime and proposed its postponement by a month or so.
"I have also added a caveat (in the GST Council meeting) that July 1 looks extremely difficult. But you cannot do frugal innovation for world's largest fiscal reform called GST. And you are going to start GST from July 1. So my submission was, let us not do frugal innovation for something which is world's largest fiscal reform," Mitra told reporters after the meeting here.
He said that there is no harm in postponement of the GST "by one month or so".
Union Finance Minister Arun Jaitley reiterated that the traders and industry had no option but to get ready by July 1 as no postponement was on the anvil.
"Irrespective of the date at which is to start, some people will say we are not ready. They have no option but to get ready. You require honest intent for that," he told reporters when asked about some industry representatives seeking more time for the roll-out.
Industry and stakeholders on Sunday hailed the GST Council's move of bringing traders, manufacturers and restaurants below Rs 75 lakh turnover under the Composition Scheme saying that it will boost small and medium enterprises in the country.
"This is a big decision in favour of traders. Its a people -centric decision, will benefit for the common people. The biggest win is for SMEs today. Biggest development for small and medium enterprises (SMEs) and small businesses that contribute on a large scale to the GDP and job sector of the country," the West Bengal Finance Minister said.
"The purpose of GST is to protect SMEs, protect states' revenues and benefit people. By stimulating SMEs, which are labour intensive, taxes will go up, impact on GDP will go up and if implemented in appropriate manner, it can lead to greater revenues," Mitra said.
Traders who have below Rs 75 lakh turnover will have to pay 1 per cent tax, manufacturers will have to pay 2 per cent while restaurant businesses will have to pay 5 per cent if they opt to go for the Composition Scheme under GST.