As the Goods and Services Tax ( GST ) completes one year on coming Monday, the Government is planning to cut the rates of more goods which are in the higher slab, i.e., 28 per cent. Reportedly, construction materials such as cement and paints may go cheaper in the near future.
The 28th GST Council meeting to be held on 21st July will take a final decision on this. Reportedly, the government is also looking at the possibility of paring the levy on several items that attract high taxes but do not yield much revenue for the government.
Sources said that the move to reduce tax rate on the construction sector is to compensate for the adverse effect of GST on this sector and to boost job generation as the country is heading towards General Elections.
There are several product segments, such as textiles, where the inputs face higher levies than the final product, creating an inverted duty structure and adding to the manufacturers’ woes as the levies are not fully refunded.
Though the GST Council in November, had a proposal to lower the tax rate of cement, that was dropped as the rate cuts had already left an over Rs 20,000-crore hole.
More changes were to be made, depending on buoyancy in collections, the government had said while stating that the long-term objective was to keep a few items as possible in the top bracket of 28% and over a period of time merge the 12% and 18% brackets.
With regard to more rate cuts, the Government had made a decision to wait till the revenue figures become stable.
