Amid demand for a rate cut by various industries, the powerful GST Council held a meeting on September 20, 2019, to decide on tax moderation keeping in mind the revenue position and the need to spur economic growth.
The GST Council, headed by Union Finance Minister Nirmala Sitharaman and comprising representatives of all States and Union Territories, had its 37th meeting in Panaji, Goa in the backdrop of economic growth hitting a six-year low of 5% for the current fiscal’s first quarter. Various industries have been demanding to reduce tax rates in the wake of an economic slowdown.
Finance Minister Nirmala Sitharaman on Friday announced the reduction of GST rates on various items. All changes in the rates would be effective from 1 October.
GST Council Meet Highlights
The following are the highlights of the 37th GST Council meeting held on September 20,2019.
- The Council recommends lower 12% cess on 1,500 cc diesel, 1,200 cc petrol vehicles with the capacity to carry up to 13 people
- Group insurance schemes for paramilitary forces under the Home Affairs ministry to be exempted from GST
- GST rate on caffeinated beverages raised from 18% to 28% with 12% compensation cess
- Uniform GST rate of 12% to be levied on polypropylene bags and sacks which are used for goods packing
- GST exempted on specified defence goods which are not manufactured in India.
- The rate levied on cut and polished semi-precious stones have been dropped from 3% to 0.25%
- Jewelry exports to attract zero GST
- GST on fishmeal used by fishermen being exempted from July 2017 to September 30. Earlier, there was a lack of clarity on the GST coverage and no tax was collected. This has been resolved now.
- Aerated drink manufacturers shall not be under the composition scheme anymore
- GST rate increased on railway wagon, coaches from 5% to 12%
- Rates have been reduced on hotel accommodation services
- For Transaction value per unit/day of ₹1000 or less, will attract nil GST. For ₹1001 up to ₹7500, the tax rate will be 12%. Anything above ₹7501 will attract 18%
- Job work services related to diamonds reduced from 5% to 1.5%. For all the machine job works in the engineering industry, GST reduced from 18% to 12%. However, the bus body building works still taxed at 18%
With most engines of growth sputtering and GDP declining to a six-year low of 5% in the April-June quarter, pressure has been mounting on the government to revive the economy. Some external factors like the US-China trade war have added to the woes.
Following the domestic and external headwinds, the Reserve Bank of India lately lowered its GDP forecast and pegged it at 6.9 percent in 2019-20. Many rating agencies and research firms expect the growth to be in the range of 6.5-7 percent.
The poor first quarter of the current fiscal has impelled the Modi government to take measures to boost growth and lift business sentiment.
GST Council images on India Content
The India Content website has a good stock of GST Council photos, including Union Finance Minister Nirmala Sitharaman images. You can easily download the pictures from the website by purchasing a license for them. The pictures are available in three sizes-small, medium and large.You can purchase various other content images from the https://www.indiacontent.in