The Goods and Services Tax (GST) council meeting in Goa concluded hours after after the government slashed corporate taxes, aiming to reviving private investment and lifting growth from a six-year low that has caused job losses and fueled discontent in the countryside.
Domestic companies will pay 22 per cent tax on their income from April 1, 2019, versus 30 per cent previously, Finance Minister Nirmala Sitharaman said Friday. The effective rate, including all additional levies, will be 25.2% and applicable on companies that aren't availing any incentives or exemptions.
Sitharaman's announcements and the GST council's meeting comes at a time when India's annual economic growth fell to a 25-quarter low of 5% in April-June period.
Here are live updates on the latest GST decisions and reactions of the latest round of stimulus.
GST rate cut on hotel rooms " adds great spurt and momentum to the hospitality industry and creates a positive sentiment that ensures more vigour and strength to Destination India," says Nakul Anand, chairman of Federation of Associations in Indian Tourism & Hospitality (FAITH), according to PTI.
Hotel industry cheers GST rate cut
Hoteliers welcome GST rate cut on rooms. Finance Minister Nirmala Sitharaman has announced zero tax for hotels room tariffs of up to Rs 1,000 per night. Hotels charging Rs 1,001 to Rs 7,500 per night will pay 12 per cent tax as against the existing 18 per cent.
GST compensation cess on petrol, diesel vehicles
Compensation cess on petrol vehicles with 10-13 person capacity reduced to 1%, reports ET Now TV channel. Compensation cess on diesel vehicles with 10-13 person capacity reduced to 3%
Polyethylene bags
Uniform GST rate of 12% for woven/non-woven polyethylene bags
Defence goods
Defence goods not being manufactured indigenously has been exempted from GST/IGST
Hotel room rates to have three GST slabs
Hotel rooms with Rs 1,000 or less tariff will have nil GST. From Rs 1,001 to Rs 7,500 will have 12% GST and above Rs 7501 will be 18%
Jewellery
Jewellery exports to now attract zero GST
Aerated drinks
Aerated drink manufacturers shall no longer get compensation scheme
GST rate on railway coaches
GST rate on railway coaches and wagons raised to 12% from 5%
Caffeinated drinks to cost more
GST rate on caffeinated drinks raised from 18% to 28%, plus there will be an additional cess of 12%
Exports
GST council has taken the view that exports must be promoted in a big way: Nirmala Sitharaman
Precious and semi-precious stones
GST rate cut on precious and semi-precious stones: Nirmala Sitharaman
Meeting concludes
GST council meeting has concluded. Some decisions are linked to promotion of tourism: Finance Minister Nirmala Sitharaman
Don't roll back GST exemption: Tamil Nadu
Tamil Nadu's fisheries minister D Jayakumar opposed a proposal for gradual removal of GST exemption on some products, saying it would affect small traders and farmers. Jayakumar also urged the council not to bring petroleum and electricity under GST.
Tamil Nadu lists demands
Tamil Nadu has told the GST Council that a decision on restructuring rates should be taken based on the revenue generated and economic conditions.
GST boost for hotel industry
The GST Council is likely to rationalise rates for five-star hotels, holding out hopes for a boost to the tourism industry. The fitment panel, comprising Central and state officials, has recommended a rate cut for outdoor catering and rate rationalisation for match sticks in its final agenda circulated to the council members.
No tax break for automobile sector?
The fitment panel of the GST council may not give a tax rate cut for the automobile sector, reckoning such a step will have a huge revenue implication
Caffeine boost
GST on caffeinated drinks will go up substantially, if the Council accepts the fitment panel’s recommendation of a steep increase in the tax rate to 40 per cent (28 per cent GST and 12 per cent cess), from the current 18 per cent, Business Stanard reported this morning.
Private entities can do their own research in collaboration with govt-funded or educational institutes and use the 2% CSR money on their own research
The scope of CSR spending has been expanded. The companies can now spend 2% of the money on state or union govt incubators, PSUs, state universities, IITs, public-funded entities.
The new companies coming up in manufacturing will be taxed at 15% if they forgo exemptions and incentives: Sitharaman
In order to stablise the flow of funds into the capital market, it is provided that enhanced surcharge introduced in Budget of July 2019 shall not apply on capital gains arising on sale of equity share in a company or a unit of a equity oriented fund.
Total revenue forgone for the reduction of corporation tax is Rs 1.45 trillion per year: Sitharaman
Reflief for listed companies that have made an announcement for buyback before July 5, tax on buyback of share shall not be charged: Sitharaman
To provide relief for companies which enjoy exemption, the MAT will be reduced to 15% : Sitharaman
These companies will not be required to pay Minimum Alternate Tax: Sitharaman
FY19-20 domestic companies can pay tax at 22% if they forgo incentives. Effective tax rate will be 25.17%: Sitharaman
The ordinance for the same has been passed
Corporation tax for domestic companies and new domestic companies to be slashed: Sitharaman
The National Democratic Alliance (NDA) government will be following the footsteps of its predecessor, the United Progressive Alliance (UPA) government, which had introduced the concept of “loan mela” to boost credit by directing banks to lend to people through public meetings.
State-owned banks will not declare stressed small businesses as non-performing assets (NPAs) till March 31, 2020, said Finance Minister Nirmala Sitharaman on Thursday, listing more measures to lift up the economy by ensuring credit.