In the 23rd GST Council Meeting, GST rate reduction for various goods and services was announced. A major highlight of the 23rd GST Council Meeting was the reduction of GST rates for various goods listed under the 28% slab.
The GST rates changes will tremendously reduce the tax burden on the common man and boost the economy. In this article, we look at a summary of GST rate changes announced in the 23rd GST Council Meeting held on 10th November 2017..
For the following goods, GST rate has been reduced from 28% to 18%. After the proposed change, only 50 items will attract GST at 28% rate. Majority of the items for which GST rate was reduced from 28% to 18% are building materials, personal care items and equipments.
GST rates on aircraft engines has been changed from 28% or 18% to 5%. Also the GST rate for aircraft tyres has been changed from 28% to 5% and aircraft seats from 28% to 5%.
The GST rate on bangles of lac/shellac has also been changed from 3% GST rate to Nil.
IGST is now not applicable on imports of lifesaving medicine supplied free of cost by overseas supplier for patients, subject to certification by DGHS of Centre or State and certain other conditions .
IGST is now not applicable on imports of goods (other than motor vehicles) under a lease agreement if IGST is paid on the lease amount.
To extend IGST exemption presently applicable to skimmed milk powder or concentrated milk, when supplied to distinct person under section 25(4) for use in production of milk for distribution through dairy cooperatives to where such milk is distributed through companies registered under the Companies Act.
IGST will not be applicable on imports of specified goods by a sports person of outstanding eminence, subject to specified conditions.
GST will not be applicable on specified goods, such as scientific or technical instruments, software, prototype supplied to public funded research institution or a university or IISc, or IlTs or NIT.
More professional items can now be imported on temporary basis without GST by accredited press persons visiting India to cover certain events, broadcasting equipments, sports items, testing equipment, under ATA carnet system. These goods are to be re-exported after the specified use is over.
In addition to the above GST rate changes and exemptions, the GST Council also announced certain clarification to improve ease of doing business in India as follows:
Inter-state movement of goods like rigs, tools, spares and goods on wheel like cranes, not being in the course of furtherance of supply of such goods, does not constitute a supply.
This clarification gives major compliance relief to industry as there are frequent inter-state movement of such kind in the course of providing services to customers or for the purposes of getting such goods repaired or refurbished or for any self-use. Service provided using such goods would in any case attract applicable tax.
GST on supply of raw cotton by agriculturist will be liable for GST, which is to be paid by the recipient of such supply under reverse charge.
Supply of e-waste attracts 5% GST rate. Concerned notification to be amended to make it amply clear that this rate applies only to e-waste discarded as waste by the consumer or bulk consumer.