CAIT requests FM to put education, medicine items under GST exemption category
With raising the pitch for a likelihood of GST rate rejig in coming months, small traders body has suggested Finance Minister Nirmala Sitharaman that different tax slabs must draw a clear distinction between goods pertaining to necessity and privilege and rate setting should be done accordingly.
The Confederation of All India Traders (CAIT) in communication to Sitharaman said items of education, medical and other items of basic necessity may be placed under the exemption category. It also suggested that the highest tax slab of 28% should strictly be restricted to luxury and privileged goods.
It also suggested that the highest tax slab of 28% should strictly be restricted to luxury and privileged goods. Currently, items such as automobile parts have also been placed under the highest tax of 28 per cent. "While drawing a list of items.
that are likely to be placed in different tax slabs there is a need to draw a distinction between the goods pertaining to necessity and privilege and accordingly the goods should be placed in the right category," CAIT Secretary General Praveen Khandelwal said.
The GST Council may do away 5% tax slab and instead introduce two slabs of 3 per cent and 8 per cent readjusting goods afresh.
CAIT said a basic fundamental may be drawn on the lines that foodgrain, items of education, medical, and other items of basic necessity may be placed under the exemption category.
Other essential items including textiles and footwear up to Rs 1,000 value and raw material may be placed under a 3% tax slab.
It said the 12 per cent and 18% tax slab should be abolished and a new revenue-neutral tax rate of about 14% may be introduced. Some of the items of daily necessity and other verticals currently in the 12 per cent tax slab may be placed under 8 per cent tax slab and all items of 18% and some of the items of 12% may be placed under 14 per cent tax slab.
It said vehicles less than Rs 20 lakhs should be placed under 14 per cent. The rate of tax on raw materials should not be more than finished goods so that there is no inverted tax on any industry
Government sources however said that any rate setting by GST Council will take into account the inflation concerns of households
The GST Council is not likely to take any step that fans inflation at a time when the economy is slowly recovering post-pandemic," an official told DH
