GST Council meeting: Tax rate cut on 177 items

Items of mass consumption such as detergent, shampoo, chocolates and beauty products will become cheaper, as the panel on Goods and Services Tax (GST) decided on Friday that only so-called sin goods should be taxed the most under the new multi-rate system.The GST Council recommended that the government prune by nearly three-quarters the number of items under the highest 28% slab, a move that should help ease the pressure the government faces over economic disruptions from the rollout of the new tax and last year’s scrapping of high-value banknotes.

The GST Council has already taken several measures to ease the compliance burden of small businesses. The next meeting of the council is expected to further liberalise the ‘composition scheme,’ a simplified tax payment plan for small businesses, and lower tax rates.

Responding to those concerns, the federal indirect tax body, the GST council, lowered the rates on 27 items and announced a slew of rule changes, such as quarterly filing of returns for businesses with sales of up to Rs 1.5 crore.

India has about 56 million small and medium-sized firms that account for some 110 million jobs in the country, official data show.