In its next meeting, slated for 9th September, the GST (Goods and Services Tax) Council may decide over imposing an 18% charge on <keyword id="20157806" type="General" weightage="20" keywordseo="payment-aggregators" source="keywords">payment aggregators</keyword> (PAs) like <keyword id="20290089" type="General" weightage="20" keywordseo="Razorpay" source="keywords">RazorPay</keyword>, Stripe, PayU, Pine Labs, and more. Reportedly, these charges will be levied on small value transactions of up to Rs 2,000, which are made via <keyword id="22719132" type="General" weightage="20" keywordseo="debit-and-credit-cards" source="keywords">debit and credit cards</keyword>. Until now, all payment aggregators were exempt from GST on all transactions up to Rs 2,000. We decode what it means for you, and how it will impact your pockets. What's happening? The <keyword id="22666613" type="General" weightage="20" keywordseo="fitment-committee" source="keywords">fitment committee</keyword>, which is made up of revenue officials from both center and states, is considering levying an 18% GST on payment aggregators. This is because officials feel that PAs are mere facilitators and intermediaries for card-based transactions, unlike banks, and thus, should be brought under GST purview. At present, they are exempt on paying GST on transaction of value less than Rs 2,000. But, if the proposal goes through in the 54th <keyword id="19994390" type="General" weightage="100" keywordseo="GST-Council" source="keywords">GST Council</keyword> meeting, every transaction you make through your credit or debit cards going ahead via such PAs will become costlier. Who are payment aggregators? PAs are essentially third-party service providers that let customers pay, and allow businesses to collect payments made via UPI, credit/debit cards or more. They are the interface between the customers and the merchants, allowing customers to opt for multiple, secure payment options, and also letting merchants manage and track fund collections and refunds. For their services, PAs levy a payment gateway fee, which ranges between 0.5% to 2% for each transaction. Post demonetisation in 2016, when currency notes of Rs 500 and Rs 1,000 were discontinued with immediate effect, the government had waived off taxes on credit and debit card transactions of up to Rs 2,000, in order to boost digital payments. If GST is levied, PAs are likely to pass on this cost to merchants. Will UPI be affected? No. Currently, UPI does not currently have a MDR, or merchant discount rate. UPI will continue to remain a lucrative option for PAs and merchants, especially for transactions under Rs 2,000, since they will not attract GST. PAs charge MDR to businesses for processing credit and debit card transactions on their behalf. What will change? The move is likely to affect small businesses the most, who thrive on multiple, low value transactions. Think of this. Say you make a payment of Rs 1,500 via your credit card on Razorpay. If the PA sets its fee at 1% of each transaction, the business will have to pay Rs 15 to the PA. But now, with the potential additional 18% GST applicable, the business will have to pay Rs 2.7 more, or about Rs 17.7 to these PAs. This might not seem much at first, but compounded over multiple transactions, might snowball into a significant cost for small businesses.

GST Council mulling 18% GST on low value transactions made via RazorPay, PayPal and more. Here's how it will impact you

The 54th <keyword id="19994390" type="General" weightage="100" keywordseo="GST-council" source="keywords">GST Council</keyword> meeting, scheduled for today, could bring a pivotal change to the taxation of <keyword id="20971977" type="General" weightage="20" keywordseo="health-insurance-premiums" source="keywords">health insurance premiums</keyword>, with the possibility of reducing the current GST rate. As per an <keyword id="23091874" type="General" weightage="20" keywordseo="ANI-report" source="keywords">ANI report</keyword>, the Council is considering a substantial <keyword id="20158303" type="General" weightage="20" keywordseo="reduction" source="keywords">reduction</keyword> in the GST applied to health insurance premiums, a move expected to benefit both individuals and the elderly. At present, these policies are subject to an 18% GST. Discussions within the Council's fitment committee, composed of both central and state <keyword id="19987671" type="General" weightage="20" keywordseo="tax" source="keywords">tax</keyword> authorities, took place on Sunday, weighing the potential advantages and drawbacks of such a reduction. Today, a detailed report concerning the GST levied on life, health, and reinsurance premiums will be tabled, highlighting its revenue implications. Following the presentation, the Council will debate the merits of adjusting the GST rate on health insurance premiums. According to the ANI report, a source said that the Council is leaning towards removing the 18% GST on individual health insurance premiums entirely. However, group health insurance policies are likely to retain the existing tax rate. Additionally, there is a proposal under consideration to introduce a tax on online payments exceeding Rs 2,000. Currently, transactions made via online payment platforms remain untaxed. Finance Minister <keyword id="19916618" type="General" weightage="20" keywordseo="nirmala-sitharaman" source="keywords">Nirmala Sitharaman</keyword> leads the GST Council, with state ministers serving as members. In a previous meeting, the Group of Ministers tasked with reviewing GST rates discussed potential reforms in the health insurance sector. Bihar’s Deputy Chief Minister, Samrat Chaudhary, who heads this group, indicated that suggestions for changes in insurance tax rates were actively being examined. West Bengal’s Finance Minister, Chandrima Bhattacharya, also advocated for reducing the 18% GST rate on life and health insurance, noting that the fitment committee was assessing the request. During the Council's last meeting in June, Finance Minister Sitharaman introduced several key reforms, including Aadhaar-based biometric integration and exemptions in railway services.

GST council meeting today: Tax on health insurance premiums expected to be reduced, says report

The <keyword id="19994390" type="General" weightage="100" keywordseo="GST-Council" source="keywords">GST Council</keyword> on Monday is expected to deliberate on a host of issues, including <keyword id="20118944" type="General" weightage="20" keywordseo="taxation" source="keywords">taxation</keyword> of insurance premiums, GoM's suggestions on rate rationalisation, and a status report on <keyword id="19939772" type="General" weightage="20" keywordseo="online-gaming" source="keywords">online gaming</keyword>, sources said. Sources said the fitment committee, comprising Centre and state tax officials, will present a report on GST levied on life, health and reinsurance premiums and the revenue implications. The GST Council, chaired by Finance Minister Nirmala Sitharaman and comprising state ministers, will decide on whether to reduce the tax burden on <keyword id="19894985" type="General" weightage="20" keywordseo="health-insurance" source="keywords">health insurance</keyword> from the current 18% or exempt certain categories of individuals, like senior citizens. The deliberations will also happen with regard to the goods and services tax (GST) cut on <keyword id="23083492" type="General" weightage="20" keywordseo="life-insurance-premium" source="keywords">life insurance premium</keyword>. In 2023-24, the Centre and states collected Rs 8,262.94 crore through GST on health <keyword id="22612491" type="General" weightage="20" keywordseo="insurance-premium" source="keywords">insurance premium</keyword>, while Rs 1,484.36 crore was collected on account of GST on health reinsurance premium. The issue of taxation on insurance premium figured in Parliament discussions with opposition members demanding that health and life insurance premiums be exempt from GST. Even Transport Minister Nitin Gadkari wrote to Sitharaman on the issue. Finance Minister Nirmala Sitharaman in her reply to discussion on the Finance Bill had said 75% of the GST collected goes to states and opposition members should ask their state finance ministers to bring the proposal at the GST Council. West Bengal Finance Minister Chandrima Bhattacharya had raised the issue in the meeting of the Group of Ministers (GoM) on rate rationalisation last month and the matter was referred to the fitment committee for further data analysis. The GoM had opined against any tinkering of four-tier GST slab of 5, 12, 18, and 28 % for the time being. The panel, however, had asked the fitment committee to look into any scope for rationalisation of rates of goods and services. With regard to online gaming, Centre and state tax officers will present a "status report" before the GST Council. The report would include <keyword id="20053837" type="General" weightage="20" keywordseo="GST-revenue" source="keywords">GST revenue</keyword> collection from the online gaming sector before and after October 1, 2023. From October 1, 2023, entry-level bets placed on online gaming platforms and casinos were subject to 28% GST. Prior to that, many online gaming companies were not paying 28% GST, arguing that there were differential tax rates for games of skill and games of chance. The GST Council in its meeting in August 2023 had clarified that online gaming platforms were required to pay 28% tax and subsequently, Central GST law was amended to make the taxation provision clear. Offshore gaming platforms were also mandated to register with GST authorities and pay taxes, failing which the government would block those sites. The council had then decided that the taxation on online gaming sector would be reviewed after six months of its implementation. Sources said the Council would deliberate on the status of taxation on the sector, and any change in tax rates is unlikely. Besides, the Council is likely to be apprised about the ongoing drive against fake registration, the success of the drive and action taken against such entities. The total amount of suspected GST evasion would also be presented before the Council. The drive, from August 16, 2024, to October 15, 2024, is aimed at detecting suspicious/fake GSTINs and to conduct requisite verification and further remedial action to weed out these fake billers. In the first drive between May 16, 2023 to July 15, 2023, against fake registration, 21,791 entities (11,392 pertaining to state tax jurisdiction and 10,399 pertaining to CBIC jurisdiction) having GST registration were discovered to be non-existent. An amount of Rs 24,010 crore (state - Rs 8,805 crore + centre - Rs 15,205 crore) of suspected tax evasion was detected during the special drive. Also, the Council would approve notifications, including that of the amnesty scheme, announced in the last council meeting. The council in June meeting took a host of taxpayer-friendly measures, including waiver of interest and penalty for demand notices issued in the first three years of GST -- 2017-18, 2018-19 and 2019-20 -- if the full tax demanded is paid by March 31, 2025. To reduce litigation, a monetary limit for tax officers, to file appeals before the GST Appellate Tribunal, the High Court and the Supreme Court was fixed at Rs 20 lakh, Rs 1 crore and Rs 2 crore, respectively, by the Council. It also recommended a reduction of the quantum of pre-deposit required to be paid by taxpayers for filing of appeals under goods and services tax (GST).

GST Council to deliberate on taxation of insurance premium, report on online gaming tomorrow

Before the crucial Goods and Services Tax (GST) council meeting scheduled for September 9th, the reconstituted Group of Ministers on GST for <keyword id="21498096" type="General" weightage="20" keywordseo="rate-rationalisation" source="keywords">rate rationalisation</keyword> met for the first time on Thursday. West Bengal finance minister Chandrima Bhattacharya says she has put in a request to reduce GST rates of 18 % on life and health <keyword id="21001667" type="General" weightage="20" keywordseo="insurance-premiums" source="keywords">insurance premiums</keyword>. She said, "I have placed the request of reducing GST on life and <keyword id="19894985" type="General" weightage="20" keywordseo="health-insurance" source="keywords">health insurance</keyword>. I have been told that the fitment committee is looking into it." Krishna Byre Gowda, Karnataka Minister said, "We have discussed the issue of relaxation in GST rates on insurance; we have asked for more data on it" On rate rationalisation or reducing the number of slabs under GST Bhattacharya said, "No member of the rate rationalisation committee is in favour of changing or reducing the number of current slabs under GST" On changes in current <keyword id="22881136" type="General" weightage="20" keywordseo="GST-slabs" source="keywords">GST slabs</keyword> Krishna Byre Gowda, says, "Why disturb something which is going on smoothly." However, sources from the GoM told that, this was the first meeting of the reconstituted GoM on rate rationalisation and no decision has been taken on reducing slabs, cutting GST rates on different items or reducing GST rate on life and health insurance premiums. Proposals have come for reducing rates for insurance, hospitality and beverages, and the <keyword id="20646010" type="General" weightage="20" keywordseo="online-gaming-sector" source="keywords">online gaming sector</keyword>, among many. The GoM for rate rationalisation was reconstituted in June 2024, after the formation of the new government at the centre and new state governments in Bihar, Andhra Pradesh and Telangana. Bihar Deputy Chief Minister Samrat Chaudhary was appointed as the convenor of the GoM on GST rate rationalisation. The other members of the reconstituted panel are Uttar Pradesh Finance Minister Suresh Kumar Khanna, Goa Transport Minister Mauvin Godinho, and Rajasthan Medical, and Health Services Minister Gajendra Singh. The GoM also includes West Bengal Finance Minister Chandrima Bhattacharya, Karnataka Revenue Minister Krishna Byre Gowda, and Kerala Finance Minister K N Balagopal. GST rate rationalisation has been pending before the committee for a long time, and it was anticipated that a decision would be taken regarding the fitment of the listed items under each GST slab. Particularly, products widely used by the public may be suggested for a transition from the 12% high-rate slab to the 5 % slab. In the last GST Council meeting held on June 22, Finance Minister <keyword id="19916618" type="General" weightage="20" keywordseo="nirmala-sitharaman" source="keywords">Nirmala Sitharaman</keyword> announced several significant measures, including Aadhaar biometric integration, and exemptions in railway services, among others.

GST slab changes unlikely soon; request for GST rate cut on insurance proposed by few states

<ul><li><keyword id="1402053" type="General" weightage="20" keywordseo="ashok-vaswani" source="Orion">Ashok Vaswani</keyword> is a Stanford graduate who is also a CA, CS and did his Bachelors at Sydenham College of Commerce.</li><li>Vaswani worked with <keyword id="44473" type="General" weightage="20" keywordseo="citigroup" source="Orion">Citigroup</keyword> and more recently, at <keyword id="6386585" type="General" weightage="20" keywordseo="barclays" source="Orion">Barclays</keyword>, where he built and grew the business to a scale.</li><li>Vaswani is obsessed with technology but also focused on earning the trust of his consumers.</li><li><keyword id="45051" type="General" weightage="20" keywordseo="uday-kotak" source="Orion">Uday Kotak</keyword> has roped in an outsider given the extent of the transformation that <keyword id="46013" type="General" weightage="20" keywordseo="kotak-mahindra-bank" source="Orion">Kotak Mahindra Bank</keyword> will need in times to come when banks will have to fight for wallet share of consumers. </li></ul>Today, you don’t need to step into a bank to make payments, check your balance or even request for a cheque book. That is if you still use those booklets. Since your bank’s mobile app allows you to do all this and much more online, can there be more digitisation in banking? Well, the new CEO of Kotak Mahindra Bank Ashok Vaswani thinks that a lot more technology can be deployed in banks. As the CEO of Barclays Bank UK, Vaswani knows how the lives of consumers can transform with digitisation. He is also cognisant of the fact that a bank does not only cater to millennials or GenZ population. At Barclays, he had a team of tech experts to help consumers who were even in their 1990s such that they could learn not just digital banking but even chat with grandkids on Skype or Zoom. That is how the new CEO of Kotak Mahindra Bank thinks, given that his head and heart are in the right place. At a time when banks are struggling to keep consumers happy while maintaining high profit margins, Vaswani could well be the man who can plug the gaps. And, if there’s something he can talk about for hours, it is the technological transformation of financial services. Not only is he cognisant of the ease that digital banking brings, but also the risk that comes along with it. This generational shift at India’s fourth largest private bank in India clearly wants to up its game in the years to come by leveraging technology to transform not only its operations but also create new and better services for its customers. Imagine an AI Bot that actually tells consumers every month on how spending on eating out is much more than feasible or that average monthly savings are not good enough when you retire. Yes, Vaswani believes that is the next stage of banking as it can open up different ecosystems. In an interview a few years ago at the University of West England, Bristol, he said: “I would submit that a lot more digitisation can happen. Why would I not be able to tell you, you are earning so much, you are spending this much and you should be saving. Can you imagine, you spent so much money on Uber and that you should be careful?” There are so many aspects of digital transformation that limits are frankly only set in the mind. As the CEO of Barclays UK, he has not just built a lot of products for consumers but even their confidence in the bank and the banking system. It is a refreshing change to hear a CEO talk about confidence in the company and not just on margins. Vaswani has a proven track record spanning three and a half decades across the world’s leading banks. He was initially at Citigroup and more recently, at Barclays, where he built and grew the business to a scale. He brings with him significant executional experience with a high degree of compliance and industrial strength across corporate and consumer businesses. Vaswani was Chief Executive Officer of Barclays Bank, UK and subsequently CEO of their global consumer, private, corporate and payments businesses and Member of the group executive committee. Earlier, he was CEO Citigroup Asia Pacific and Member of the Citigroup Global Operating Management Committees. He also built and ran various country and regional businesses across geographies. What makes him interesting is that he has not only run global banks but has even been president of Pagaya Technologies, a US-Israeli AI fintech company. This kind of exposure makes him a much better candidate than any insider at Kotak Mahindra Bank. At last count, there were three top contenders for the job, but Uday Kotak has roped in an outsider given the extent of the transformation that the bank will need to undertake to remain relevant in the face of competition from other fintechs. Ashok is married to Veena and their daughter is working in the United States of America. It is interesting that Uday Kotak, first generation founder and promoter of Kotak Mahindra Bank, has brought in an outsider to run the bank. Organisations typically are wary of bringing in outsiders at top jobs mostly because of the friction that results from such hiring due to cultural fitment and acceptance of a known candidate. It is easier for the rank and file to accept an insider rather than an outsider but Uday Kotak has chosen to take the risky route. While in some unfortunate cases like Infosys, where Vishal Sikka did not fare too well when promoters stepped away in 2014, the experiment of outsiders has been rather successful at the Tata Group. When Ratan Tata took over the reins at the Tata Group, he brought in Kishor Chaukar who came from ICICI Securities to head Tata Industries. Ravi Kant came in from Philips India in 1999, and headed commercial vehicles for Tata Motors before becoming MD in 2005. In 1998, the then vice-chairman of Hindustan Lever (now known as Hindustan Unilever), moved to Tata Sons as executive director. Typically, Indian corporations bring in overseas talent when they believe that the requisite skills are not available in India. But given that India’s private banking sector has grown and flourished under the stewardship of homegrown talent, this shift is an interesting move by Uday Kotak, who clearly sees merit in Vaswani’s experience outside of India. No wonder Uday Kotak, Founder and Director, Kotak Mahindra Bank said: “I am proud that we bring a ‘Global Indian’ home to build Kotak and India of tomorrow.” Interestingly, Ashok Vaswani is a Bachelor of Commerce, Economics and Accountancy, from the Sydenham College of Commerce and Economics (Bombay University), CA from the Institute of Chartered Accountants of India, CS from the Institute of Company Secretaries of India and Executive Education from the Stanford University Graduate School of Business. Uday Kotak too is alumnus of Sydenham College and has a postgraduate degree in management studies in 1982 from Jamnalal Bajaj Institute of Management Studies.

The CEO who believes that there’s a lot more to digitise at banks

Following uproar in the Parliament over <keyword id="6354679" type="General" weightage="20" keywordseo="gst" source="Orion">GST</keyword> on <keyword id="72247" type="General" weightage="20" keywordseo="Food-items" source="Orion">food items</keyword>, <keyword id="309842" type="General" weightage="50" keywordseo="union-finance" source="Orion">Union Finance</keyword> Minister <keyword id="129243" type="General" weightage="100" keywordseo="nirmala-sitharaman" source="Orion">Nirmala Sitharaman</keyword> on Tuesday defended the imposition of 5 per cent GST on food articles such as cereals, rice, flour and curd, which are pre-packaged and labelled, saying that it was a unanimous decision of the <keyword id="6355040" type="General" weightage="80" keywordseo="gst-council" source="Orion">GST Council</keyword> last month in which even non-BJP ruled states were present. The <keyword id="25455" type="General" weightage="80" keywordseo="finance" source="Orion">Finance</keyword> Minister released a list of items that will not attract any GST, when sold loose, and not pre-packed or pre-labeled. In a series of tweets, she said: "Recently, the GST Council in its 47th meeting recommended to reconsider the approach for imposition of GST on specified food items like pulses, cereals, flour, etc. There have been a lot of misconceptions about this that have been spread. Here is a thread to lay the facts." "Is this the first time such food articles are being taxed? No. States were collecting significant revenue from foodgrain in the pre-GST regime. Punjab alone collected more Rs 2,000 cr on food grain by way of purchase tax. UP collected Rs 700 cr," she said. "Taking this into account, when GST was rolled out, a GST rate of 5% was made applicable on BRANDED cereals, pulses, flour. Later this was amended to tax only such items which were sold under REGISTERED brand or brand on which enforceable right was not foregone by supplier," the FM said. "However, soon rampant misuse of this provision was observed by reputed manufacturers &amp; brand owners and gradually GST revenue from these items fell significantly. This was RESENTED by suppliers and industry associations who were paying taxes on branded goods. They wrote to the Govt to impose GST uniformly on all packaged commodities to stop such misuse. This rampant evasion in tax was also observed by States." "The Fitment Committee - consisting of officers from Rajasthan, West Bengal, <keyword id="20154" type="General" weightage="80" keywordseo="tamil-nadu" source="Orion">Tamil Nadu</keyword>, Bihar, Uttar Pradesh, Karnataka, Maharashtra, Haryana, and Gujarat - had also examined this issue over SEVERAL meetings and made its recommendations for changing the modalities to curb misuse. "It is in this context that the GST Council in its 47th meeting took the decision. With effect from July 18, 2022, only the modalities of imposition of GST on these goods was changed with no change in coverage of GST except 2-3 items," said the minister. "It has been prescribed that GST on these goods shall apply when supplied in 'pre-packaged and labelled' commodities attracting the provisions of Legal Metrology Act." "For example, items like pulses, cereals like rice, wheat, and flour, etc, earlier attracted GST @ 5% when branded and packed in unit container. From 18.7.2022, these items would attract GST when 'pre-packaged and labeled'," <keyword id="679937" type="General" weightage="80" keywordseo="sitharaman" source="Orion">Sitharaman</keyword> tweeted. SEE ALSO : <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/auto/news/ather-450x-gen-3-new-electric-scooter-debuted-today/articleshow/92985192.cms">Ather’s Ravneet Phokela on the company’s new scooter, affordability, EV safety and more</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/india/news/two-months-four-airlines-and-14-air-safety-incidents-dgca-says-safety-paramount/articleshow/92983985.cms">Two months, four airlines and 14 air safety incidents — DGCA says 'safety paramount'</a>

Food items when sold loose won't attract any GST, says Nirmala Sitharaman

<ul><li>Many everyday use products -- from pens to cartons, bags, plastics and cards, stand to get dearer as the government looks to merge the 12% and 18% <keyword id="6354679" type="General" weightage="20" keywordseo="gst" source="Orion">GST</keyword> rates.</li><li>The biggest reason for such rationalisation is correction in the <keyword id="2307968" type="General" weightage="20" keywordseo="inverted-duty" source="Orion">inverted duty</keyword> structure that leads to difficulties in claiming the net input tax credit.</li><li>The government is likely to move to just <keyword id="12151525" type="General" weightage="20" keywordseo="two-tax-slabs" source="Orion">two tax slabs</keyword> of 5% and 18% over the next 6-18 months.</li></ul>The Indian government wants fewer tax slabs under the goods and services tax (GST) regime. Recently, <keyword id="82366" type="General" weightage="20" keywordseo="chief-economic-advisor" source="Orion">Chief Economic Advisor</keyword> K V Subramanian said that GST could be turned into a three-rate structure by merging two existing tax slabs. However, experts say that it could also be down to just two slabs, eventually. And the latest move to increase the GST to 18% on pens, cartons, bags, plastics and cards, is part of that plan. Though fewer slabs will make it easier for businesses to pay taxes, it could lead to some key products and services getting more expensive and that is an issue, which the government must be wary of. <cmsannotation type="cmsannotation" annotationid="Current GST Rate Slabs" comment="subhead" text="Current GST Rate Slabs">Current GST Rate Slabs</cmsannotation> <table style="border-width: initial; border-style: none;" class="redcator-table-advance"><colgroup></colgroup><col /><col /><tbody><tr><td style="border-left:solid #cccccc 0.75pt;border-right:solid #cccccc 0.75pt;border-bottom:solid #cccccc 0.75pt;border-top:solid #cccccc 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Goods </td><td style="border-left:solid #cccccc 0.75pt;border-right:solid #cccccc 0.75pt;border-bottom:solid #cccccc 0.75pt;border-top:solid #cccccc 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Services </td></tr><tr><td style="border-left:solid #cccccc 0.75pt;border-right:solid #cccccc 0.75pt;border-bottom:solid #cccccc 0.75pt;border-top:solid #cccccc 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">0% </td><td style="border-left:solid #cccccc 0.75pt;border-right:solid #cccccc 0.75pt;border-bottom:solid #cccccc 0.75pt;border-top:solid #cccccc 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">0% </td></tr><tr><td style="border-left:solid #cccccc 0.75pt;border-right:solid #cccccc 0.75pt;border-bottom:solid #cccccc 0.75pt;border-top:solid #cccccc 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">0.25% </td><td style="border-left:solid #cccccc 0.75pt;border-right:solid #cccccc 0.75pt;border-bottom:solid #cccccc 0.75pt;border-top:solid #cccccc 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">5% </td></tr><tr><td style="border-left:solid #cccccc 0.75pt;border-right:solid #cccccc 0.75pt;border-bottom:solid #cccccc 0.75pt;border-top:solid #cccccc 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">3% </td><td style="border-left:solid #cccccc 0.75pt;border-right:solid #cccccc 0.75pt;border-bottom:solid #cccccc 0.75pt;border-top:solid #cccccc 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">12% </td></tr><tr><td style="border-left:solid #cccccc 0.75pt;border-right:solid #cccccc 0.75pt;border-bottom:solid #cccccc 0.75pt;border-top:solid #cccccc 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">5% </td><td style="border-left:solid #cccccc 0.75pt;border-right:solid #cccccc 0.75pt;border-bottom:solid #cccccc 0.75pt;border-top:solid #cccccc 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">18% </td></tr><tr><td style="border-left:solid #cccccc 0.75pt;border-right:solid #cccccc 0.75pt;border-bottom:solid #cccccc 0.75pt;border-top:solid #cccccc 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">12% </td><td style="border-left:solid #cccccc 0.75pt;border-right:solid #cccccc 0.75pt;border-bottom:solid #cccccc 0.75pt;border-top:solid #cccccc 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">28% </td></tr><tr><td style="border-left:solid #cccccc 0.75pt;border-right:solid #cccccc 0.75pt;border-bottom:solid #cccccc 0.75pt;border-top:solid #cccccc 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">18% </td><td style="border-left:solid #cccccc 0.75pt;border-right:solid #cccccc 0.75pt;border-bottom:solid #cccccc 0.75pt;border-top:solid #cccccc 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><tr><td style="border-left:solid #cccccc 0.75pt;border-right:solid #cccccc 0.75pt;border-bottom:solid #cccccc 0.75pt;border-top:solid #cccccc 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">28% </td><td style="border-left:solid #cccccc 0.75pt;border-right:solid #cccccc 0.75pt;border-bottom:solid #cccccc 0.75pt;border-top:solid #cccccc 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table>In the 45th GST Council meeting held on Friday last week, some products that were earlier taxed at 5% or 12%, including cartons, boxes, bags, packing containers of paper, plastic products, metal ores, scented sweet supari, cards, catalogue, and printed material, were moved to 18%, along with other products. Most of these everyday items are used by even those who are not financially well off. And a higher tax is the last thing they need. “What is the logic of taxing them [cardboard boxes] at 18%. Except for rationalisation, I cannot think of any other reason for change in these rates,” said <keyword id="3809784" type="General" weightage="20" keywordseo="sandeep-chilana" source="Orion">Sandeep Chilana</keyword>, managing partner at Chilana &amp; Chilana Associates. Some rates, however, such as for retro fitment kits for vehicles used by the disabled, fortified rice kernels, medicine Keytruda for treatment of cancer and biodiesel supplied to oil marketing companies, among others, were reduced to 5%. <cmsannotation type="cmsannotation" annotationid="Here’s why having fewer tax slabs is good" comment="subhead" text="Here’s why having fewer tax slabs is good">Here’s why having fewer tax slabs is good</cmsannotation> The development comes as the government looks to move to a twin-tax structure under the GST regime, <keyword id="136087" type="General" weightage="20" keywordseo="bipin-sapra" source="Orion">Bipin Sapra</keyword>, tax partner at advisory firm EY told Business Insider India in a video interaction. The biggest reason for such rationalisation, he said, is correction in the inverted duty structure that leads to difficulties in claiming the net input tax credit. An inverted duty structure is a situation where inputs or raw materials are taxed higher than the output or finished products for sale. “But ultimately your product is becoming costlier at some point because once the (input tax) credit gets utilised, what is the net amount of tax that you have added to the product, would need to be seen,” said Sapra. He also expected more such rationalisations to happen in the future. At present, GST is levied under five slabs for services, and under seven slab rates for goods, with the tax on gold that is kept at 3% and rough precious and semi-precious stones that are placed at a special rate of 0.25% under GST. But that may change soon as the government is likely to move to just two tax slabs of 5% and 18% over the next 6-18 months, said Sapra. “We will see more of this happening in the coming days, because they [the government] are ultimately trying to move to two rates of 5% and 18%,” he said. So, most of the items in the 12% GST rate category are likely to move up to 18%, while some may be brought down to 5%. “But, predominantly, whatever we see at 12%, based on the discussions I have had with policymakers, will ultimately move to 18%. That is the broad reason why we are seeing this. My view will be within 6-18 months, we will move to a two-rate regime,” he said. Further, moving certain products to the higher 18% tax slab also seems unfair to customers and businesses during the pandemic, said <keyword id="107827" type="General" weightage="20" keywordseo="anita-rastogi" source="Orion">Anita Rastogi</keyword>, partner - GST and indirect taxes at PwC. “I do not think 18% is the right rate, if we want to do a two-slab rate. It should either be 15% or 16%, because 18% is not the genuine correct rate in today’s scenario,” she said. “There are a lot of factors that need to be re-considered post the pandemic, [such as] the situation in which the businesses are and also the purchasing power of the people. So, if at all the rate fitment committee is discussing it, we really need to urge them to relook at the rates at which they want to do it.” <keyword id="3063029" type="General" weightage="20" keywordseo="abhishek-rastogi" source="Orion">Abhishek Rastogi</keyword>, partner - indirect taxes at law firm Khaitan &amp; Co., concurred. “16% is ideal. There may be some anti-profiteering issues coming down from 18% to 16%, but 16% is the best rate. If that rate doesn’t suit in terms of revenue, then 5% can go up to 6%,” he said. Since the rationalisation for change in the rates was not given by the GST Council, Sapra said that it would be helpful if the committee came up with a vision statement to give more clarity to businesses, instead of doing patchwork to solve the issues of tax cascading, inverted duty structure and perceived revenue loss. “Right now, we believe that the GST council is doing what it needs to (do) to keep the GST running and solve the problems the industry or state governments throw at it, but we need more clarity and vision from the GST council,” he said. 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It’s good that India wants just two GST slabs⁠ but it has to ensure it doesn’t hurt consumers

New Delhi, Mar 5 () Retired employees of the Department of Telecommunications (DoT) and BSNL are planning to organise a march to Parliament next week for demanding revision in their pension and its delinking from wage revision. "All-India BSNL DOT Pensioners Association (AIBDPA) is all set for a Parliament March on March 12, 2020. The demand put forward is pension revision of BSNL absorbed retirees from January 1, 2017, with 15 per cent fitment based on new pay scales, delinking wage revision," the Association said in a statement. AIBDPA said former telecom minister Manoj Sinha had assured the All Unions and Associations of BSNL (AUAB) on December 3, 2018, that an action will be initiated to revise the pension of BSNL absorbed retirees delinking wage revision. The DoT based on this assurance wrote two letters to the Department of Pension and Pensioners Welfare, but failed to give the proposal as required by the pension department, the statement said. "The second term of (Narendra) Modi government has disowned the assurance given by the former minister and has taken a negative stand on pension revision," AIBDPA alleged. It said current Telecom Minister Ravi Shankar Prasad, while replying to a question in Parliament, said pension revision is possible only after wage revision in BSNL and also new pay scales are required for the pension revision. "The fact remains that pension revision has no way connected to BSNL, as the entire liability of pension and pensionary benefits of BSNL absorbed retirees is to be borne by the central government as per Rule 37A of Central Civil Services (Pension) Rules, 1972," the statement said. The Association said it has already been recommended by the 3rd Pay Revision Committee (PRC) for the executives, and in respect of non-executives, pay scales have been approved by the BSNL management and recognised unions through bilateral talks. "Therefore, it is unjust on the part of the government to deny the pension revision even after three years," the statement said. The 3rd PRC has recommended a maximum of 15 per cent fitment for the pay revision from January 1, 2017. PRS HRS

DoT, BSNL pensioners plan Parliament march next week

In what is one of the biggest reductions since <keyword id="6354679" type="ORGANIZATION" weightage="20" keywordseo="GST">GST</keyword> came into effect from July 1, the <keyword id="6355040" type="ORGANIZATION" weightage="20" keywordseo="GST-Council">GST Council</keyword> has today reduced <keyword id="6403501" type="PERSON" weightage="20" keywordseo="tax-rates">tax rates</keyword> on more than 175 items. The council, which is currently meeting in Guwahati, has decided to cut keep only 50 luxury and 'sin’ goods like tobacco in the highest slab. Meanwhile, tax rates have been slashed from the existing 28% on a host of consumer items such as chocolates, chewing gum, shampoo, deodorant, shoe polish, detergents, nutrition drinks, marble and cosmetics. "Only 50 items will face 28% rate," Bihar finance minister Sushil Modi told reporters on the sidelines of the ongoing Council meet. "There were 227 items in the 28% slab. The fitment committee had recommended that it should be pruned to 62 items. But the GST Council has further pruned to more items. Now all types of chewing gum, chocolates, preparation for women cosmetics, shaving and after-shave items, deodorants, washing powder detergent and granite and marble. All these items have been put in the 18% category," Modi said. Paints, cement have been retained at 28%. Luxury goods such as washing machine and air conditioners will still be taxed at 28%. The tax cuts will have a revenue implication of about Rs 20,000 crore. Even as there is a consensus that slowly, the 28 per cent slab should be brought to 18 per cent, the council is still skeptical because of a huge revenue implication. In the next few hours, the Council is expected to take crucial decisions to make composition scheme more attractive, improve compliance burden, and it may explore the possibility of including real estate under GST.

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It’s good that India wants just two GST slabs⁠ but it has to ensure it doesn’t hurt consumers

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DoT, BSNL pensioners plan Parliament march next week

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Only 50 luxury and 'sin' items find their place in GST's highest slab

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