In the biggest GST rejig yet, tax rates on over 200 items were cut to provide relief to consumers and businesses amid economic slowdown. The cut in tax will cost Rs 20,000 crore in revenues annually.
The move was welcomes by the India Inc. which said that the ‘big changes in the GST rates’ will lead to a pickup in consumer demand and significantly revive the business sentiment.
"The increase in the composition scheme threshold would make life much easier for the small business entities," Industry body ASSOCHAM's Secretary General DS Rawat said.
He added that the impact of these changes would be positively felt in the next few months.
Bipin Sapra, Tax Partner, EY India, said, that while the reduction of rates would substantially reduce the prices of a number of commodities, the government may need to balance the revenue considerations too.
Krishan Arora, Partner, Grant Thornton India LLP said the decision of GST Council on pruning of the 28 slab list is a welcome move for many industries in mass consumption space.
Vishal Raheja of Taxmann described the move as "great step" and said, "In future, we may expect that Government will further slash tax rates by moving from 4-tier tax slabs to lesser slabs or even single GST rate".
Abhishek A Rastogi of Khaitan & Co said while it was expected that there will be rate cuts, it was never expected that the list will be trimmed down so significantly.
"With the rate reduction on a plethora of products, the next step of the government should be to ensure that the benefit of the rate reduction goes to the consumers," he said.