After defeats in 3 states, Modi government announces reduction in GST on seven items

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The central government on Saturday removed seven items from the 28% tax bracket and placed them under the 18% bracket for the GST. The decision was taken during the Goods and Services Tax (GST) Council meeting. The items removed from higher GST category include accessories for carriages for people with disabilities,  articles of natural cork, and corks roughly squared or de-bagged.

GST

Union Finance Minister Arun Jaitley said that the new GST rates will take effect from 1 January, 2019. Jaitley also said that the GST on movie tickets priced up to Rs. 100 will now attract 12% tax as opposed to 18% earlier. Tickets costing over Rs. 100 have been put under 28% tax bracket as opposed to 28% before.

The Consumer Electronics and Appliances Manufacturers Association (CEAMA) said it was also hoping for a reduction in GST duty to 18 per cent on higher screen sizes of up to 40-42 inches, which are sold the most now.

“The drop in duty from 28 per cent to 18 per cent in TV segments up to 32-inch screen size is definetely a welcome move for the industry. 32-inch screen size has a mass market and a wide consumer base but unfortunately duty of AC was not dropped and this would have an impact on the industry,” CEAMA President Kamal Nandi told news agency PTI.

Prime Minister Narendra Modi had to face plenty of criticism for his decision to roll out the GST last year. Only last week, one of his die-hard supporters had publicly slammed him during an interaction with the prime minister, saying his economic policies had adversely impacted the middle-class.

The latest reduction in GST rates on certain products is being viewed as the BJP’s response to its electoral defeat in three key states, Madhya Pradesh, Rajasthan and Chhattisgarh. Analysts believe that the central government may be forced to announce more such reductions ahead of the next year’s Lok Sabha polls.

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