GST Council meeting underway, tax rate cut on automobile tyres likely

Amid talks of tax rate cut ahead of the 2019 Lok Sabha elections, the Goods and Services Tax (GST) Council meeting will convene on Saturday. During the meeting, the Council is likely to make a decision on slashing tax rates on several items such as cement, automobile tyres to 18 per cent from the current 28 per cent. "A 28 per cent tax on automobile tyre impacts common man because ultimately he has to shell out the tax. The overall focus on December 22 Council meeting will be to lessen the GST burden on common man," PTI quoted a GST official as saying.

The meeting, first after Prime Minister Narendra Modi’s remark that his government was planning to bring 99 per cent items under the slab of 18 per cent or less. As of now, there are 34 items left in the highest tax bracket of 28 per cent. These include automobile tyre, cement, large screen colour television, digital camera, air conditioners and other commonly used items.

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The other items like aerated drinks, cigarette, bidi, tobacco products, pan masala, smoking pipes, automobiles, aircraft, yachts, revolvers and pistols, gambling lottery are likely to be retained in the 28 per cent slab.

On Tuesday, Prime Minister Narendra Modi had said his government was planning to further simplify the GST tax regime by bringing most items under the 18 per cent slab. "We are of the opinion of making GST as smooth as possible for the enterprises. In earlier days, the GST was framed according to the existing VAT or excise tax structures exercised in those respective states. (With) the discussions held from time to time, the tax system is getting improved," Modi had said during his speech at the Republic Summit in Mumbai.

The Goods and Services Tax (GST) has five tax slabs – 0 per cent, 8, 12,18 and the highest 28 per cent. While several essential items of daily use were kept under the 0 per cent slab, luxury and some white goods attracted 28 per cent tax.

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The government has collected over Rs 7.76 lakh crore from the GST in the first eight months (April-November) of the current fiscal, below the monthly target of 1.12 lakh crore. The 2018-19 budget had estimated annual GST collection at Rs 13.48 lakh crore.