It also revised the rates for a number of goods and services.
With the textile industry, which generates huge employment, raising concerns over 18 per cent GST
on job works, such as embroidery, stitching, designing, etc, the Council has cut it to 5 per cent.
“There will be 5 per cent tax on the entire chain in the textile sector,” Finance Minister Arun Jaitley said. Earlier, there was 5 per cent GST
on fabric, but every job work attracted 18 per cent tax.
The textile sector welcomed the move, but it had some reservations. “This will help in seamless credit flow. The Council, unfortunately, did not consider reducing the GST
on man-made fibre from 18 per cent to 12 per cent. This will discourage the use of this type of fibre,” said Raja M Shanmugham, president, Tirupur Textiles Association.
Rates on inputs specific to tractors were also reduced to 18 per cent from 28 per cent, while that on government work contracts to 12 per cent from 18 per cent. Besides, rates on other services, including rent a car, job work in newspaper printing, and entry to planetariums, were reduced.
On government works contract, Telangana wanted the GST to be reduced to 5 per cent from the current 18 per cent. The Council decided it to be cut to 12 per cent, with input tax credit.
Jaitley said steel and cement sectors were involved in government work contracts; so input credit would be high.
The finance minister said the Council would take a call on the revision of rates for other items at its next meeting on September 9 in Hyderabad.
There was an expectation in some quarters that the threshold for the e-way registration would be increased to goods worth Rs 1 lakh.
Jaitley said the registration process would be technology driver, with little human intervention.
Also, one permit would allow a trucker to travel 100 km in a day; if they took more than a day to travel this distance, they would need to renew the permit.
Experts, too, were not happy with e-way Bill.
M S Mani of Deloitte said it ran contrary to the idea of one nation one market that the GST tried to build.
Pratik Jain of PwC said, “For the real benefit of the GST to be realised, it is important that supply chain bottlenecks are reduced. It is debatable whether the e-way Bill is required at all or transport documents, including a copy of the invoice, should suffice."
Jaitley said nearly 8.6 million tax assessees have registered on the GST Network. Of them, 7.1 million have migrated from old system; 1.5 were the new enrollments.
Additional reporting by T E Narasimhan