Union Minister Arun Jaitley, who was instrumental in launching GST from July 1, 2017, has said that the 28 per cent category of goods under the Goods and Services tax (GST) is being phased out and the bracket currently covers mostly luxury items or “sin goods”. The tax on other items outside the luxury-sin goods such as cement, air-conditioners, large screen televisions and a handful of others could also be reduced as revenues rise. It is only a matter of time that the final obituary of the ‘Congress Legacy Tax’ is written off. Only the luxury-sin tax would remain,” Jaitley expressed his views on Facebook. The past one year has seen rate reduction in 384 commodities and not a single increase contrasting the GST regime that rolled out subsuming the indirect tax regime under Congress-led UPA rule, headed. The lawyer turned politician, who is recuperating following kidney transplantation, is hopeful that GST rates on cement, ACs and televisions will be reduced as tax revenue increases and only luxury and sin goods will be in its basket attracting the highest slab of 28 per cent. Without giving any timeframe, the lawyer turned politico who is recuperating following kidney transplantation, posted his optimism on Facebook. Recalling the teething troubles in the implementation of one tax for one nation, Jaitley said the pre-GST indirect tax regime, during which most of the household items attracted a levy of 31 per cent as “Congress Legacy Tax”. In one year, our government has reduced taxes on 384 commodities; he said. The Goods and Services Tax has subsumed 17 local taxes and faced teething trouble affecting both traders and consumers. The govt has been able to allay their misconception to a large extent.”Today, the 28 per cent category is being phased out. Bulk of these items remaining in this category is only luxury items or sin goods. The other items outside the luxury–sin goods category are cement, air-conditioners, large screen televisions and a handful of others,” Jaitley said.”Hopefully, with further expansion of revenues, these few items may also witness a change of category. Thus within a record period of thirteen months, the GST Council has almost phased out the 28 percent category. It is only a matter of time that the final obituary of the ‘Congress Legacy Tax’ is written. Only the luxury-sin tax would remain,” he said.A total of 68 different categories of services have witnessed their rate reduction.”The net revenue loss which Government have suffered on account of the reduction of tax on goods and services is about INR 70,000 crore. Since State Governments have been guaranteed a 14 per cent increase over their pre-GST revenues for the first five years, this burden has entirely been borne from the share of the Central Government,” Jaitley said. Undoubtedly, the tax reduction has reduced the cost to the consumers, increased his purchasing capacity and added to the increased consumption in the economy. Now, taxes on all household items stand reduced from 28 per cent to 18 per cent and 12 per cent, he added. Lower rates have resulted in higher collections benefiting consumers. Both trading community and consumers have accepted the new tax regime after reservation initially, he added.
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