'At the end of the day, we want to see maximum items out and only few items remaining in the 28 per cent slab.'
Illustration: Dominic Xavier/Rediff.com
Another 5 to 6 items may come down to 18 per cent from 28 per cent at the next GST Council meeting, Assam Finance Minister Himanta Biswa Sarma tells Dilasha Seth.
Any further reduction beyond that may need to wait to gauge the revenue implications, Sarma says.
It was one of the most hectic council meetings since the GST rollout. What benefits do you foresee for consumers and industry from the decisions taken?
When we implemented GST, we had promised the taxpayers that after three months we will have a review. Some review had already been taken place in Delhi. Some were still left for further examination.
On Friday, we completed one part of it because except sin goods and white goods, we have brought down items in the 28 per cent slab.
Many procedural changes have happened. For small traders, composition limit has been hiked.
Exempted goods will now not be taken into account for calculating taxes under the composition scheme. This is a huge relief for the people.
I think consumers will get the benefit straightaway as tax rates on restaurants have been reduced to 5 per cent..
Do you see a scope for further reduction in items in the 28 per cent slab in the next council meeting?
At the end of the day, we want to see maximum items out and only few items remaining in the 28 per cent slab.
But that depends on how much revenue the government is generating.
What my own understanding is that another five to six goods can come down to 18 per cent instantly. But beyond that you have to wait for the revenue implications. These items will be taken up for discussion in thenext meeting.
What will be the revenue implication of sharp reduction in rates?
We cannot calculate the revenue implications as you don't know the revenues against the items.
A lot of amount is stuck in IGST (integrated GST), refund is also due.
We have discussed the matter. Revenue may be reduced by Rs 20,000 crore (Rs 200 billion) due to shifting of products to lower tax brackets, including tax rate for restaurants. But that is again a notional figure.
Will inclusion of real estate in GST be discussed in the next meeting now? What else will be taken up in the next meeting?
We had thought of discussing (the possibility of) inclusion of the realty sector under GST. We could not discuss it on Friday, but will take it up in the next meeting.
There are many more things which we need to discuss in the next meeting. In the next meeting, we will also discuss ways to give relief to the handloom and handicraft sector.
What sort of relief does the handloom and handicraft sector require?
Some discussions took place and finally we have decided that this is a very important issue because HSN (harmonised system of nomenclature) code is similar.
Suppose there is a handmade soap and a soap produced by a large company, how do we give relief to the handmade soap when the HSN code is same?
One way to give relief is to increase the revenue threshold for the composition scheme. That we have done. But that may not be the final thing.
Ultimately, you need to examine how HSN codes may be differentiated between handmade, handloom, powerloom and other products. So we have set this thing in motion.
But you will have to wait for the final outcome.
What were your key recommendations for the real estate sector?
It was on the agenda. Since we could not take it up on Friday, it will be premature to talk about it.