The tax on wet grinders, tanks and armoured vehicles was reduced to 12 per cent from the peak rate. And, a uniform five per cent tax prescribed for all restaurants, both air-conditioned and not.
Broadly, in the highest tax slab are what are termed luxury goods and ‘sin’ goods — pan masala, aerated water, beverages, cigars and cigarettes, tobacco products, cement, paints, perfumes, air conditioners, dish washing machines, washing machines, refrigerators, vacuum cleaners, cars, two-wheelers, aircraft and yachts.
Rate on six items were reduced from 18 per cent to five per cent, on eight items from 12 per cent to five per cent, and on six items from five per cent to nil.
The rate on condensed milk, refined sugar, pasta, curry paste, diabetic food, medical grade oxygen, printing ink, handbags, hats, spectacle frames and bamboo/cane furniture has been cut from 18 per cent to 12 per cent.
No more GST on advances for goods
The government on Wednesday did away with the goods and services tax (GST) on advances paid against future supply of goods for all businesses — a move aimed at easing the working capital for companies.
Companies were reportedly facing working capital loss on account of the condition to pay the GST on advance received. Earlier, the government had exempted businesses up to Rs 1.5 crore annual turnover from paying the GST on receipt of advance. It has decided to extend it to all, barring those part of the composition scheme that allows easier compliance and a flat tax rate for small businesses.
“It is a very significant relief, which businesses were looking forward to. Under the VAT (value added tax) regime, there was no tax on advances for goods, but it was introduced under the GST regime. Since input credit was only available after receipt of goods, this led to working capital blockage,” said Pratik Jain of consultants PwC India.
For services, the GST continues to be payable on advances, in line with the provisions under the erstwhile service tax laws, he said.
Abhishek Jain, tax partner at EY India, said: ”This comes as huge relief for businesses, both in terms of compliances and working capital loss.”