The council meeting made a decision to reduce GST rates from 28 % to 18 % in respect of 178 items as per the recommendation by the fitment committee.
The Goods and Services Tax (GST) Council, which has been holding its two-day meeting in Guwahati, reduced the tax rate of almost 175 items from 28 per cent; however, 50 luxury and "sin" goods, including tobacco, will remain in the highest slab, according to media reports on Friday.
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Finance Minister Arun Jaitley had earlier hinted at pruning the list of items in the highest GST tax bracket of 28 per cent after revenue in the new regime equalise collections previously.
13 items have been moved from 18% to 12%, 6 items from 18% to 5%, 8 items from 12% to 5%, 6 items from 5% to nil, the FM said. All the new GST rates will come into effect from November 15 next. All restaurants will be levied GST at 5 per cent, without input tax credit benefits. "Now, they can not avoid a debate in public domain or in the GST Council", he said.
"Congress FMs letter to Mr Jaitley will set the tone for discussions in the GST Council today (Friday)", Chidambaram said in a series of Tweets. "The GST fitment committee has also recommended reducing tax rates from 18% to 12% on a number of goods", Sushil Modi said at a function at the Bihar Chamber of Commerce here.
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The GST Meeting also decided that there will no benefit of input tax credit for restaurants.
"Government can no longer duck these issues", he said adding that the Gujarat elections had forced the government to heed advice of the opposition and experts on the flaws in the implementation of GST. However, in case of restaurants within star category hotels with room rent more than Rs 7500 the GST rate will remain 18 % with ITC benefit.
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