Revenue Secretary Hasmukh Adhia said all these decisions will take effect prospectively from November 15.
GUWAHATI: Providing a big relief to India Inc and consumers alike, the GST Council decided on Friday to lower the tax rate on 178 items, leaving just 50 items in the top 28 per cent rate slab under the Goods and Services Tax.
The 23rd meeting in Guwahati on Friday, the GST Council decided to drop items used by common man and middle class from the highest tax slab. Further, Assam finance minister Himanta Biswa Sarma said the 18% slab has been rationalised to 12% and 5%.
Currently, 12 per cent GST on food bill is levied in non-AC restaurants and 18 per cent in air-conditioned ones. All these got input tax credit, a facility to set off tax paid on inputs with final tax.
On Friday, the Council meeting decided to reduced the rate on items such as chocolates, washing powder, shampoos, aftershave, deodorants, granite and marble from the earlier 28 per cent GST to 18 per cent.
Jaitley said the restaurants, however, did not pass on the input tax credit to customers and so the facility is being withdrawn and a uniform 5 per cent tax is levied on all restaurants without the distinction of AC or non-AC.
Other items that will now be taxed at 18 per cent include washbasins, plywood, sanitary and construction materials, wrist watches, fire-fighting equipment and mattresses.
The rate on fly ash, bricks and some sweets has been lowered to 5 per cent from 18 per cent.Exports of services to Nepal and Bhutan have already been exempted from GST.
Former Finance Minister P. Chidambaram said he is hopeful of a “shower of changes in GST rates” in lieu of the council meeting.