World

Telecom sector in India disappointed with 18% GST rates

Telecom sector in India disappointed with 18% GST rates

The GST Council includes four rates, of 5%, 12%, 18% and 28% to be applied on different goods and services in the industry.

The GST council will meet again on June 3 in New Delhi to finalise residual issues before rolling out the uniform tax regime across the country on July 1.

Auto manufacturers body Society of Indian Automobile Manufacturers (SIAM) on Friday welcomed the new GST (Goods and Services Tax) rates on automobiles.

On Friday, the second day of the meeting, the Council made a decision to tax services under four slabs of 5 per cent, 12 per cent, 18 per cent and 28 per cent.

"Services, which are at now taxed 15 per cent will be fitted into the 18 per cent bracket".

It shall empower the state to levy taxes on all intra-state supplies of goods and services or both, except on supply of alcoholic liquor for human consumption, at a rate to be notified not exceeding 20 per cent.

Tripura Finance Minister Bhanulal Saha said that passing of the State GST Bill was mandatory for rollout of the new indirect tax regime.

Union Finance Minister Arun Jaitley told the media here on Thursday, after the first day of the council meeting, that "there is no increase in taxes of the items considered today".




With the government announcing that 7 per cent of items will remain under the exempt category, the number of items which enjoy zero per cent tax will come down drastically.

"(With) the standard rate items of 12.5 percent and 15 percent, plus the cascading effect of local taxes, the tax rate was going up to 30-31 percent.

Jaitley further informed that there will be a 12 per cent service tax on non-AC restaurants and service tax in restaurants in five-star hotels will be same as that in ordinary hotels.

Aerated drinks and cars will be in the 28 per cent bracket. "The government was sensitive to the impact of higher GST slab on industry and the consumer is significantly positive", said CAPA Centre for Aviation.

No decision was taken on tax rate on lottery. All cars, buses, trucks and motorcycles including moped as well as personal aircraft and luxury yachts will attract a peak Goods and Services Tax of 28 per cent. "Companies may or may not structure their tariff as per provision of refund but customers will have to pay 18 per cent tax everytime bill is generated so consumers will be hit under the GST". Coal which is presently at 11 percent GST is now taxed at 5 percent.

There is no increase in taxes of items considered today.

Seven per cent of the items fall under the exempt list while 14 per cent have been put in the lowest tax bracket of 5 per cent.

As of May 4, eight states including Rajasthan, Telangana, Bihar, Madhya Pradesh, Haryana and Jharkhand have passed a state goods and services tax Act in their state assemblies.


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