With less than 15 days before the Union Budget 2018 is presented, the Goods and Services Tax (GST) Council plans to cut rates on as many as 70 items in its next meeting, reported Business Standard.
It is also learnt that the council can amend rules to simplify filing of GST returns and also plug some existing loopholes in the system.
"Around 40-50 services will be taken up for a rate revision in the council meeting. These are services that were earlier exempt but were taxed under the GST regime. They are facing issues," a government official told the business daily.
After the implementation of GST, the Union Finance Ministry has no discretionary capacity to bring in changes in indirect taxes; GST council has been given the exclusive authority in terms of indirect taxes.
The official further said the council is likely to prune the rates for agriculture implements — a move to boost agricultural sector, which is reeling under pressure.
Earlier this week, Finance Minister Arun Jaitley said the agriculture sector would be given the top priority by the government in Union Budget 2018.
"Among the priority areas, the agriculture sector is on top. Ensuring the benefits reaches the agri-sector and growth is visible — this is among the priority areas for us," Jaitley said.
The meeting is scheduled for Thursday, January 18. This is the last council meeting before the finance minister presents the Union Budget on February 1.
"Agriculture implements that are currently taxed up to 18 percent may come under the 12-percent or the 5-percent bracket," the official said.
He added that the council may bring in some change in tax rates of bio-diesel buses. Currently, bio-diesel buses attract the highest slab of GST, i.e. 28 percent, which may be revised downward.
On the services front, job works may be allowed as part of the composition scheme, which will imply a flat rate of tax and easier compliance, reported BS.
"Currently, only a few services such as housekeeping, carpentry, etc., are subject to 18 percent GST, if provided through an e-commerce platform, without the benefit of the threshold limit of Rs 20 lakh. We are expecting the rate to be reduced to 5 percent in such cases. Many job work services could also come under lower rate," the business daily quoted Pratik Jain, partner, PwC India, as saying.
