Formerly some 227 items were allocated the highest GST slab of 28 per cent, but after months of debate and plenty of meetings with the stakeholders, the government has decided to cut that list down to 50 items.
The decision was announced by the GST Council, which has been facing flak from small businesses and traders over the increased taxes and red tape.
Most daily household items, including deodorants, toothpaste, shampoos, shaving cream, after shave lotions, washing powder, chewing gums, shoe polishes, granite, marble and some flavoured drinks will now be cheaper. A total of 177 items face a price cut, most of which will now be taxed at 18 per cent.
“There was unanimity that in 28 per cent category there should be only sin and demerit goods. So, today the GST Council took a historic decision, that in the 28 per cent slab there will be only 50 items and the remaining items have been brought down to 18 per cent,” Bihar Deputy Chief Minister Sushil Modi, a member of the GST Council, told reporters in a press conference.
Goods that continue to attract the highest tax include items like washing machines, air conditioners, paints, cement and other such items deemed ‘luxury’.
The Council also said they would look into goods in the 18 per cent category, and also reconsider the current requirement to file tax paperwork thrice a month. The thrice a month filings have come under particular attack by businesses.
The new lowered tax rates will cost the Government an estimated Rs 20,000 crore in revenue.