New Delhi: In a big overhaul of new national tax GST, only 50 items will remain in the highest tax slab of 28 per cent, with 178 others moved to the 18 per cent bracket effective November 15.
The new GST changes come amid allegations that the government’s GST roll-out and last year’s notes ban have caused economic disruption.
Dining out will also become cheaper, with food at all restaurants in the country, except those in starred hotels, to be taxed at 5 per cent rather than 18 per cent, Union finance minister Arun Jaitley on Friday announced.
Jaitley announced the changes after a day-long meeting with state finance ministers in the powerful GST council that he heads. Prime Minister Narendra Modi called the decisions “people-friendly and people-centric”.
The Finance Minister said in more tax rate changes, 13 items will move from the 18 per cent slab to 12 per cent, six items from 18 per cent to 5 per cent, eight items from 12 to 5 and six from 5 per cent to nil. Under GST, goods and services are taxed in four brackets — 5, 12, 18 and 28 per cent.
Among goods that will no longer be taxed 28 per cent GST is daily use items like shampoo, deodorant, toothpaste, shaving cream, aftershave lotion, shoe polish, chocolate, chewing gum and nutritious drinks.
On eating out, the finance minister said that while all restaurants in and outside hotels will carry a 5 per cent GST charge, at those in starred hotels with room tariffs above 7,500 a night customers will have to pay 18 per cent GST. The benefit of ITC (Input Tax Credit) to restaurants has been revoked to restaurants because they were not passing on the benefit to customers, the minister said.