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Saturday, 27 June 2020

GST rate for mobile phones to go up to 18%

  • The fitment committee of the Goods and Services Tax Council has recommended calibration of the GST rate structure to correct the inverted duty structure on various items like mobile phones, footwear, textiles and fertilizers.
  • Accordingly, the GST council has recommended a hike in the GST rate on mobile phones and specified parts, which currently attract 12 per cent, to 18 per cent.
  • The Council also deliberated on the issue of calibrating the rate of other items for removing inversion in future meetings with further consultation and examination of issue.
  • GST rate on all types of matches (handmade and other than handmade) has been rationalised to 12 per cent (from 5 per cent on handmade matches and 18 per cent on other matches). This would address the classification issues. This issue was deliberated earlier in the 37th meeting and was pending for decision.
  • GST rate on maintenance, repair and overhaul (MRO) services in respect of aircraft has been reduced from 18 percent to 5 per cent with full ITC and to change the place of supply for B2B MRO services to the location of recipient. 
  • This change is likely to assist in setting up of MRO services in India. Domestic MRO will also get protection due to 5 per cent tax paid under the Customs Tariff Act, 1975 on most imported goods (sent abroad for repairs) as this tax is not available as credit.
  • The Council has proposed to issue notifications giving effect to these recommendations on 1 April 2020. Source: %
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