Krishan Arora, Partner, Grant Thornton India LLP on GST Council prunes the items in 28% tax slab to 50 from 227 said that “The decision of GST Council on pruning of the 28% slab list would be a welcome move for many industries in mass consumption space. In certain cases, it is also likely to bring down the total tax impact even lower than earlier regime which would be a big relief to the industry as well as consumers. Rationalization exercise of tax slabs needs to be carried out comprehensively with due consideration to the significance of the industry and the overall tax incidence under earlier regime whether it is 28% GST category or 18% GST residuary category where many products are currently falling.”
Suresh Nandlal Rohira, Partner at Grant Thornton India LLP on GST Council announcements for FMCG sector said that “The GST committee decided on trimming the list of items down to just 50 items and limiting the 28% bracket for demerit goods, as far as possible. As an illustrative list, goods such as chewing gum, detergent, chocolates, shaving & after shave items, deodorants, washing powder, etc. shall be among st the ones to be provided with this relief in tax rate. However, luxury goods such as air conditioners, washing machines, etc. shall be continued to be taxed at 28% and so will goods such as paints and cement. It’s an important observation that goods like Cements and Paints cannot be considered as luxury items, therefore the Council should re look into it.
This amendment by the government shall be one of the important changes in the GST law since its implementation in July 2017. The rate cut is slated to have a far reaching practical impact and shall greatly benefit the common mass. As such, the move has been welcomed by a host of industry experts and politicians alike.”