The GST council has reduced the tax rate on job work on all textile-related items to five per cent from 18 per cent to ensure that the labour-intensive sector is not adversely impacted under the new tax regime.
The GST Council also reduced tax rate on some tractor parts from 28 per cent to 18 per cent after the high rate came in for criticism since it had the potential of increasing the cost burden on the sensitive farm sector. The council, headed by Union Finance Minister Arun Jaitley and comprising finance ministers of all states, also finalised the e-way Bill that mandates pre-registration of all goods worth over 50,000 before they are transported for sale.
Briefing reporters after the meeting, Jaitley said the date of application of the e-way Bill would be notified shortly. It will not be applicable for exempted goods. Work contracts under GST will be taxed at 12 per cent with input tax credit.
Te Finance Minister appealed to businesses to pass on the benefit of the reduced tax under GST to consumers, failing which the anti-profiteering mechanism will be triggered. The government is reported to have received complaints from states that the reduction in taxes under the GST regime was not being passed on by several business entities. The Council will meet next on September 9 in Hyderabad, Jaitley added.