Union Finance Minister Arun Jaitley on Friday announced moving 178 items from the 28 per cent to the 18 per cent tax bracket under the Goods and Services Tax (GST), applicable from November 15.
The changes in the tax system were decided at the 23rd GST Council meeting headed by the finance minister, at Guwahati today.
"Having done the exercise, in the last three meetings, we have been systematically looking at the 28 per cent tax bracket and rationalising items from it to the lesser category," Jaitley said, while addressing the press, and added that 178 items would be brought from 28 per cent to 18 per cent from November 15.
The items include aircraft parts, construction materials, detergent, toiletries and other such items.
Further, 13 items were moved from the 18 per cent to the 12 per cent tax bracket, six items from 18 per cent to 5 per cent, eight items from 12 per cent to 5 per cent, and six items from 5 per cent to nil.
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In another major change, the ITC (input tax credit) benefit to all restaurants barring starred hotels have been cancelled. Accordingly, restaurants in starred-hotels will charge 18 per cent tax with the ITC, while other restaurants will charge the GST of five per cent without the ITC.
The GST council meeting also brought some relief to tax-payers by reducing the penalty for late tax filing.
Finance and Revenue Secretary, Hasmukh Adhia said, "If there is a NIL report to be filed, then the fine for late filing will be reduced from Rs 200 per day to Rs 20 per day. And for other tax filers, the reduction will be from Rs 200 to Rs 50 per day," and added, "States might not get revenue, which is why some penalty is there."
Adhia also informed that filing of return for 3B would be continued till March 2018.
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