NEW DELHI: After slashing the corporate tax rate, the GST Council has been far more cautious with GST reduction, giving no major relief to the beleaguered automobile sector as the fitment committee of the Council rejected proposals to cut rates on over 200 items, including automobiles, footwear, mineral water, biscuits, citing revenue implications.
The Council approved a reduction in tax rates on rooms with a tariff of Rs 7,500 and above from 28 to18 per cent and those with tariff below Rs 7,500 from 18 to 12 per cent.
While GST on rooms with tariff below Rs 1,000 has been scrapped.
While tax on outdoor catering has been reduced to five per cent from existing 18 per cent with an input tax credit, she said.
The cess levied on top of the maximum 28 per cent tax rate on petrol vehicles with the capacity to carry 10-13 persons has been reduced to one per cent and the same for diesel vehicles has been cut to three per cent.
The Council also approved rate reductions on cut and polished semi-precious stones. Also, the tax on diamond job works has been reduced to 1.5 from 5 per cent earlier.
The Council also exempted from GST/IGST import of silver/platinum by specified nominated agencies and their supply by these agencies to exporters for manufacture and export of jewellery.
It also decided to reduce rate of GST from 18 to 12 per cent on the supply of machine job work such as in engineering industry, except supply of job work in relation to bus bodybuilding which would remain at 18 per cent.
However, GST rate on railway wagons and coaches has been increased to 12 per cent from the existing five per cent while that on caffeinated drinks was raised to 28 per cent from 18 per cent, with an additional 12 per cent GST compensation cess. A uniform GST rate of 12 per cent will be levied on woven/non-woven polyethene bags.
“There is really nothing in the GST decisions which can spark a reversal of the slowdown in the economy,” said Sumit Dutt Majumder, former chairman, Central Board of Excise and Customs.
The demand slowdown has been dogging the Indian economy which grew at just five per cent in the first quarter of this financial year.
GST rate on rail wagons
The GST rate on railway wagons and coaches has been increased to 12 per cent from the existing five per cent while that on caffeinated drinks was raised to 28 from 18 per cent, with GST compensation cess