The government is planning to cut Goods and Service Tax on consumer durables such as refrigerators and washing machines which are still in the top 28 per cent slot, the Times of India has reported.
The GST Council had in its meeting in Guwahati on 10 November decided to slash rates on more than 175 items originally taxed at 28 per cent to 18 per cent in one of the biggest tax reductions since the new system kicked in.
According to Money Control, the council had said it would keep only 50 luxury goods (and others like tobacco) in the highest slab. Only luxury or sin goods are likely to stay in the 28 per cent slot.
The move will be a significant boost for the sector plagued by excess capacity. It will also boost consumption and better GST compliance.
The industry has welcomed the decision.
"All consumer durables, if taxed uniformly at 18%, would give a big fillip to domestic manufacturers as this would also lead to significant price reduction, leading to increased demand. Several of them - such as dishwashers and air-conditioners - have, over a period of time, ceased to be luxuries, making an 18% rate a reasonable request," said Deloitte India partner M S Mani.
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