New Delhi: The GST Council this week may approve lowering of the tax rates on a number of goods, including handmade furniture, bath fittings, plastic products and items of daily use like shampoo and soaps, which will give relief to the common man as well as businesses.
Sources said many items used by ordinary people which are now in the 28 per cent tax bracket could be brought down to 18 per cent. The GST Council is also likely to rationalise the tax rate in sectors where the total incidence of taxation has gone up because the goods were earlier either exempt from excise or attracted lower VAT rates in the previous indirect tax regime.
“A rationalisation of items in the 28 per cent tax bracket is expected. Most of the daily use items could be lowered to 18 per cent. Also, the tax rate on items like furniture, electric switches, plastic pipes could be relooked," said official sources. The GST Council is due to meet in Guwa-hati on November 10.
Customers pay in cash to avoid GST
At present, all types of furniture attract a 28 per cent tax under GST. Wooden furniture is made by unorganised sector artisans and is mostly used by middle class families, and there have been demands for lowering the tax rate on them. Bath fittings like shower baths, sinks, washbasins, bidets, lavatory pans, seats and covers, flushing cisterns and similar sanitaryware of plastics now attract a 28 per cent levy.
According to reports, high tax rates in furniture and bath fittings had resulted in people avoiding taxes by paying for these items in cash.
In markets of Delhi and Noida, traders were asking people to pay in cash to avoid the high 28 per cent GST on furniture and bath fittings, which leads to encouragement of the cash economy and generation of stash.
