PRFC

The GST Council on Friday overhauled the indirect tax regime reducing the 28 percent tax levied on 178 items to 18 percent or lesser. The GST Council on Friday overhauled the new tax regime reducing the 28 percent tax levied on 178 items to 18 percent or lesser. Most important of them all, the Council decided to salsh the tax rate on AC and non-AC restaurants to 5 percent from the current 18 percent slab. The new rates will be applicable effective November 15. The council, which met Guwahati, has decided to cut keep only 50 luxury and ‘sin’ goods like tobacco in the highest slab, paving the way for price cuts in a raft of commonly used goods from furniture to sanitary ware. The move, which is likely to cost the exchequer Rs 20,000 crore, comes on the back of trader protests and the upcoming Gujarat Assembly elections. “We have rationalised certain items from the 28% to the 18% or even less. Optically, there are few items that shouldn’t be at 28% that were there earlier. Ther...

What is GST? Goods & Services Tax is a  comprehensive ,  multi-stage ,  destination-based tax  that will be levied on every  value addition . To understand this, we need to understand the concepts under this definition. Let us start with the term ‘Multi-stage’. Now, there are multiple steps an item goes through from manufacture or production to the final sale. Buying of raw materials is the first stage. The second stage is production or manufacture. Then, there is the warehousing of materials. Next, comes the sale of the product to the retailer. And in the final stage, the retailer sells you – the end consumer – the product, completing its life cycle. So, if we had to look at a pictorial description of the various stages, it would look like: Goods and Services Tax will be levied on each of these stages, which makes it a multi-stage tax. How? We will see that shortly, but before that, let us talk about ‘Value Addition’. Let us assume that a ma...