India Reduces Tax on 177 items

On Friday, November 10, the Goods and Services Tax (GST) Council announced the biggest concession on taxes since the new indirect tax system took effect on July 1. The Council reduced the list of items attracting the top 28% tax rate to just 50 from 227 previously. The items that were removed were then placed under the 18% tax bracket.

The tax rate was reduced on  177 items ranging rom granite and marble to chewing gum and chocolates, deodorants, and detergents, and will result in a revenue loss of about $3 billion  a year. The tax cut is aimed at making the new indirect tax regime more acceptable to people and to reduce the burden on businesses, reports Mint.

Taxes

Prime Minister Modi said, “There is consensus that slowly the 28% slab should be brought to 18%. But it will take some time because it has a big revenue implication.”

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Posted on by Gunjan Bagla
Gunjan Bagla
California-based management consultant Gunjan Bagla runs Amritt, a consulting firm helping American companies to succeed in India. Amritt is the trusted advisor for India market research, India business development, India market entry, Global Engineering, Global Technology Scouting, India R&D and Open Innovation. Gunjan is author of "Business in 21st Century India: How to Profit Today from Tomorrow’s Most Exciting Market" (Hachette Book Group, 2008), Amazon's top rated title on the subject. He has appeared as the India Expert on BBC Television, Bloomberg TV, Fox Cable Business and has been quoted in the New York Times, the Los Angeles Times, the Hollywood Reporter and Business Week for his expertise on India.

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