Gold and Jewellery: There was a large hue and cry when the government had come out with a policy of taxation on gold at a rate of 1 per cent. Extensive lobbying was carried out to do away with it but the government stood firm on its stand. The bullion merchants did not want to maintain the records and registers citing a variety of reasons. There were protests and collective shutdowns by the traders. The gold and gold jewellery purchase rush when demonetization was declared goes a long way to show why people want to keep it out of the tax net. To break the safe haven and to widen the tax base, excise of 1 per cent along with VAT of 1 per cent or higher was imposed on gold and gold jewellery. This will now be 3 per cent under the GST regime.
Biris and Tendu leaves: Another controversial item was the Biri and the tendu leaves used to manufacture it. Under the garb of employment protection and cheaper tobacco alternative for the labour class biris have been exempt from taxes in the past. By understanding the damage the biris do to the health of individuals and bringing it at par with the cigarette taxation, the GST council has put the biris in the highest GST slab of 28 per cent while the tendu leaves will be taxed at 18 per cent. However, there will be no cess on biris, unlike the cigarettes.
Biscuits and Textiles: All types of biscuits will be in the GST net at a uniform rate of 18 per cent. In the current scenario, the biscuits based on their rates per Kg are taxed between 20 to 24 per cent. Similarly, in the textiles, the silk and jute fibre will not attract any tax. Cotton, natural fibres and yarns will have the 5 per cent GST rate. The manmade fibre and yarns will attract 18 per cent. For manmade apparel, the bifurcation in the GST rate will happen at the INR 1000 threshold. Against the existing rate of 7 per cent, it will be 5 and 12 per cent.
Footwear and solar Panels: There are lower taxes for the footwear industry. The current tax rate of around 10 per cent for footwear costing up to INR 500 will drop to 5 per cent under GST. The higher rate ones will come down from the 23-30 per cent range to 18 per cent when GST comes to play. Solar panels which are in vogue these days will be taxed at 5 per cent.
The 15th meeting of the GST Council seems to be a success with most of the pending decisions taken. Lottery tax is yet to be decided. The GST Council plans to hold the next meeting on Jun 11, to review the rates based on industry representations and take suitable decisions. Over 1700 goods and services have already been covered in the GST span and clarity has emerged in most of the cases. The GST launch date is now less than a month away and every attempt is being made to keep the schedule.