GST rate cut on cement may cost Rs 13,000 crore to exchequer
Cement is now the only item of use for 'common man' that is still under 28 per cent GST slab, rest all items under the slab are either sin and luxury goods, said finance minister ArunJaitley after the conclusion of the 31st GST Council meeting. In all there are now only 34 items left in the 28 per cent tax slab. This is a sharp reduction from over 220 items under 28 per cent tax slab to begin with. The GST Council decided to shift seven items from the 28 per cent tax slab to the lower tax slabs. These include monitors and TVs up to 32 inches, power banks of lithium ion, video games consoles (28 per cent to 18 per cent), etc. According to finance minister, except for cement, which is used by common man, only sin and luxury goods are now left in the 28 per cent category. Other than cement, auto components are also part of the 28 per cent tax slab. The tax implication of reducing GST rate on cement from 28 per cent to 18 per cent is to the tune of Rs 13,000 crore and that of the auto components would be Rs 20,000 crore. Speaking to media on the sidelines of the GST Council meeting, revenue secretary Ajay Bhushan Pandey, said that Rs 13,000 crore is too big a hit to take at one go. Therefore, a decision on rationalisation of GST rate on cement was deferred for the time being. Overall, GST rates of 17 goods and 6 services were reduced today. The revenue implication of the move would be to the tune of Rs 5,500 crore. Though the revenue secretary believe that with the steps taken to bring more businesses to under GST fold, the overall impact on revenue (of the reduction of rates) could be even lower.
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