ANALYSIS
Recall that the highest slab was originally envisaged only for a few luxury and sin products, but several other items were included in it.
Prime Minister Narendra Modi’s indication that only a handful of articles will remain in the top GST bracket should bring cheer to the people. The items that will continue to attract 28 per cent tax are either demerit goods or items of luxury such as big cars and aircraft meant for the uber rich. Recall that the highest slab was originally envisaged only for a few luxury and sin products, but several other items were included in it.
For the government, the latest reduction is part of an attempt to further simplify the Goods and Services Tax. But many would view it as a pre-poll sop for the middle class. With the Congress winning in three of the five states that went to assembly polls recently, and then announcing farm loan waivers after immediately coming to power, the BJP could not be seen lagging behind.
However, to be fair, since GST was rolled out on July 1 last year, the GST Council has rationalised rates four times — October 6, November 10, January 18 and July 21. The rationalisation exercise in November had left only 50 items in the top slab, thus leaving the national exchequer poorer by an estimated Rs 20,000 crore.
If the latest round of exclusion is carried out — the PM’s move needs to be approved by the Council — the loss of revenue from cement alone would be about Rs 3,500 crore. Perhaps, the exchequer will be able to contain the revenue loss.
The PM has justified the rate cut by citing the increase in the number of registered enterprises — from 6.6 million before GST to 12 million now. Moreover, the Insolvency and Bankruptcy Code has enabled the government to recover Rs 3 lakh crore in a span of one and a half years from big corporates who would have otherwise escaped from repaying bank loans by citing losses.
One also needs to bear in mind that lower taxes normally translate to a higher degree of compliance by taxpayers. The revised slab comes at a time when the rupee is appreciating against the dollar, fuel prices are cheap and stock markets are upbeat.
Even then, rate cuts alone may not be enough because businesses are still finding the process of return filing and claiming input-tax credit refunds complex and tedious. Looking at the larger picture, many feel that the rate cut in cement would offer a much-needed boost to the housing, infrastructure and the construction industry as well as have positive impact on employment generation.
In its July meeting, the GST Council had rationalised the 28 per cent slab by cutting rates on paints and varnishes. However, the government should also ensure that FMCGS pass on the benefits of rate cuts to consumers. The National Anti-profiteering Authority received more than 300 complaints on FMCGs, overcharging on items such as groceries, shampoo, cosmetics, hair oil for which GST was reduced from 28 per cent to 18 per cent.
After all, if voter is the king, s/he should be able to feel special at the end of the month.
Ratan Tata's final project: A four-storey centre, made at cost of Rs 165 crore, it is....
Viral video: Two women dance to Tamannaah Bhatia’s 'Aaj Ki Raat' burns internet, watch
Meet woman, one of world's youngest CEOs, designed her first website at 6, now runs...
Manu Bhaker opts for master's degree after Olympic medal win, says, 'Life is an...'
Apple iPhone maker buys equipment worth Rs 2670000000 for India factory, gears up to start...
DNA TV Show: Congress not to contest UP by-polls, lends 'unconditionally' support to SP
Venom The Last Dance movie review: Tom Hardy's final Marvel outing is a king-size disappointment
Pushpa, Stree 2 choreographer Jani Master gets bail in sexual assault case
Who is Justice Sanjiv Khanna, the next Chief Justice of India?
KL Rahul rejects retention offer from Lucknow Super Giants, set to enter IPL 2025 auction: Report
Mukesh Ambani's Reliance to give bonus share ahead of Diwali, check last date to apply
When Hollywood actress Natalie Portman insulted a BIG Bollywood megastar, he was asked to 'get lost'
J-K: 2 porters killed, 3 soldiers injured after Army vehicle attacked in Gulmarg
Shah Rukh Khan is back on small screen with legendary tale, it will lead up to…
Pre-Diwali Skincare: 5 quick tips to achieve flawless skin this festive season
Bomb threats to Indian planes continue: More than 80 flights receive fresh security alerts
Mumbai Police arrests vegetable seller from Jamshedpur for sending death threat to Salman Khan
'Dukh toh hota hi hai': Ex-India star blames MS Dhoni for dropping him at the 'peak of career'
Amitabh Bachchan defended Aishwarya Rai after she opted out of this film due to...
THIS company lost Rs 36430 crore in 6 hours, it's not Mukesh Ambani's Reliance, Tata Motors
Narak Chaturdashi 2024: Know the date, time, rituals, significance of Choti Diwali
'Attitude is...': Ex-Tesla employee shares experience working with Elon Musk
IND vs NZ: Washington Sundar scripts history in Pune, becomes first Indian to achieve big feat
Mukesh Ambani hails Meta CEO, says Mark Zuckerberg will go down in history for...
SC issues notice to Ajit Pawar on Sharad Pawar faction's plea over NCP 'clock' symbol
'UPSC hotspot': THIS college produces most IAS, IPS officers every year
Unlock the Power of Quick Recovery: Why every windows PC needs RestoreX360
Royal Enfield first electric bike spotted, it will be unveiled on…
'Dead' baby found alive during funeral in..., what happened next will SHOCK you!
Anil Ambani gets good news ahead of Diwali, his Rs 17016 crore company receives...
Apple iPhone 16 pro is now available for just Rs 52,930 on Amazon, how you can grab this deal
Diwali 2024: 5 vastu-friendly home decor tips to welcome wealth, prosperity this Deepawali
'Breasts, not oranges': Cancer awareness campaign by Yuvraj Singh's NGO draws flak, DMRC recalls it
Virat Kohli reveals being in tears while talking to Anushka Sharma following THIS incident
Man kidnapped from chaat stall, but there's a twist, watch viral video
IND vs NZ: R Ashwin goes past Australia's Nathan Lyon to set new World Test Championship record
Dhanteras 2024: Date, significance, shubh muhurat and more
Nvidia rolls out Hindi-language AI model in India: What is it and how will it work?
Netizens not happy with this billionaire's apartment in Bengaluru, says, 'you can afford better'
'Kejriwal, Atishi looted Rs 8,500 crore for...': BJP protests at Yamuna's Chhath Ghat
Cyclone Dana trains cancelled: Over 300 trains cancelled, check full list here
Bengaluru school's Rs 1.5 lakh fees for Nursery sparks controversy, parents' reaction goes viral
THIS rule will change from November 1, Airtel, Jio, Vi, BSNL users should pay attention, it will...
Video of man dancing around Russian woman at India Gate goes viral, sparks online debate
Innovating the Future: Aniruddh Tiwari's visionary advancements in AI and aata analytics
Revolutionising Enterprise Data Frameworks: How one lead data engineer is driving innovation
Pakistani model's BOLD move, walks Miss World ramp without...; watch video
What role did IAS officer Srushti Deshmukh's family play in her UPSC success? Details here
BIG allegation against Donald Trump, ex-model says former president groped her in front of...
THIS rule made by Ratan Tata won't allow Noel Tata to become Tata Sons chairman, it is...
JioHotstar domain acquired by Delhi-based app developer, he now wants Mukesh Ambani's Reliance to...