Budget 2018: Council may cut GST rates for 70 items; 40 on revision list

Aiming to boost the struggling agriculture and rural economy, and encourage clean energy, the Council is expected to rationalise rates

Union Budget

A fortnight ahead of the Union Budget 2018, the Goods and Services Tax (GST) Council is likely to take up rationalisation of rates of about 70 items, of which at least 40 are services. Amendment in rules may also be taken up to simplify filing and plug some of the loopholes. A fitment committee of officers has made these recommendations to the Council, which will meet on Thursday.

With the aim to boost struggling agriculture and rural economy, and encourage clean energy, the Council is expected to rationalise rates of agriculture implements and unconventional fuel buses. It is the last Council meeting before Finance Minister Arun Jaitley presents his last full Budget on 1 February, before general elections in 2019.

“Around 40 to 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,” said a government official.

Agriculture implements that are currently taxed up to 18 per cent may come under the 12 per cent or the 5 per cent bracket.

Agriculture sector growth is projected to fall to 2.1 per cent in FY18 because of an expected drop in the rabi harvest, an almost 3 per cent fall in kharif production, according to Advance Estimates by the Central Statistics Office. In the earlier meetings, the Council had lowered the rate on tractor parts from 28 per cent to 18 per cent.

In the last full Budget of the National Democratic Alliance government, measures to give a push to the rural, and small enterprise sectors are likely.

Among others, bio-diesel buses, which attract 28 per cent GST, may see a downward revision. Karnataka is one of the states to have given a big push to bio-diesel buses that are environment friendly. Karnataka State Road Transport Corporation (KSRTC) has inducted a slew of buses that run on bio-diesel. Click Here

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