GST council sends Kashmir carpet to Fitment Committee

SRINAGAR: The Goods and Services Tax Council, in its 25th meeting, revised the rates applicable on several goods and services categories and discussed further simplification of the returns filing process, The Quint reported. The Council agreed that most of the handicraft items need to be taken to low tax slabs and the case of Kashmir Carpet was also part of the debate. The case has been sent to the Fitment Committee.

The panel accepted a proposal to reduce the GST rates on 29 goods and 53 categories of services, Finance Minister Arun Jaitley said in a media conference after the meeting. The new rates will be effective from Jan. 25, he added.

Dr Haseeb A Drabu and Arun Jaitley

The fitment committee, that decides what goods and services fall under which tax slab, also defined the items that fall under handicrafts. The committee identified 40 such handicraft items and more will be added based on the suggestions of the GST Council, Jaitley said, The Quint reported. Since most of the Kashmir handicrafts fall in hand made category, it is obvious that they will fall in this category. The GST Council, however, is yet to release he list of the handicraft items that will have lower GST slabs.

J&K Finance Minister Dr Haseeb Drabu has publicly said that the Council is positive in reducing the tax of most of the handicrafts including carpet, the main item in Kashmir’s handmade basket. Carpet traders have maintained that after the de-monetisation, the sale of carpets has taken a hit and an increased tax has made it unattractive for the buyers. This situation, they insist, have led to a locked capital of more than Rs 500 crore in the inventory and started impacting the artisan payments thus accelerating an occupation shift.

“Addressing the media after the meeting, Jaitley also said about 29 handicraft items would attract no tax and asserted that the move was taken to protect jobs in the hand-made industry,” Indian Express reported. “India exports about Rs 4,000 crore of handicrafts every year, including handmade carpets. Presently, handicraft items are placed in the 12-18 per cent tax slab.”

Hajira weaving carpet along with her daughter.

Here’s the complete list of goods and categories services for which the GST Council revised rates on Thursday.

The GST Council today accepted the fitment committee’s recommendations to revise rates of 29 goods and 53 categories of services. Given below are the items whose rates have been revised, reported The Quint.

List of Goods Where GST Rate Will Be Reduced To 18% From 28%

Old and used motor vehicles, medium and large

Buses, which exclusively run on biofuels

Rate cut if no input tax credit of central excise duty/VAT/GST availed

List of Goods Where GST Rate Will Be Reduced To 12% From 28%

All types of old and used motor vehicles, other than large medium and large cars and SUVs

Rate cut if no input tax credit of central excise duty/VAT/GST availed

An Elusive Brand

List of Goods Where GST Rate Will Be Reduced To 12% From 18%

Sugar boiled confectionery

Drinking water packed in 20 litres bottles

Fertilisers grade phosphoric acid

Biodiesel

Bamboo wood building joinery

Drip Irrigation system including laterals, sprinklers

Mechanical sprayers

12 types of biopesticides

List of Goods Where GST Rate Will Be Reduced To 5% From 18%

Tamarind kernel powder

Mehendi paste in cones

LPG supplied for supply to households by private distributors

Scientific and technical instruments, apparatus, equipment, accessories, parts, components, spares, tools, mockups and modules, raw material and consumables required for launch vehicles and satellites and payloads

List of Goods Where GST Rate Will Be Reduced To 5% From 12%

Articles of straw, of esparto or of other plaiting materials; basket ware and wickerwork

List of Goods Where GST Rate Will Be Reduced To 5% From 12% (With No Refund of Unutilised Input Tax Credit)

Velvet fabric

List of Goods Where GST Rate Will Be Reduced To 0.25% From 3%

Diamonds and precious stones

List of Goods Where GST Rate Will Be Increased To 12% From 5%

Cigarette filter rods

List of Goods Where GST Rate Will Be Increased To 5% From Nil

Rice bran (other than de-oiled rice bran)

For all the key decisions taken by the GST Council, read our live blog.

Rate Revision in Services Categories

List of Services Where GST Rate Will Be Reduced To 12% From 18%

Construction of metro and monorail projects

Common effluent treatment plants

List of Services Where GST Rate Will Be Reduced To 5% From 18%

Tailoring

List of Services Where GST Rate Will Be Reduced To 18% From 28%

Admission to theme parks, water parks, joy rides, merry-go-rounds, go-carting and ballet

Works Contract Services Where GST Rate Will Be Reduced To 12% From 18%

Works Contract Services provided by sub-contractor to the main contractor providing WCS to Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity, which attract GST of 12%

If WCS attracts 5% GST, their sub-contractor also be liable for 5% GST

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