The GST Council, which met on June 3rd to decide the tax rate on remaining six items, has finalised all the pending rules, including those on transition and returns forms, for the implementation of the most sweeping tax reform in the country since independence in less than a month from now. The council also decided the tax rate to be levied on the six items, including gold, bidis, biscuits, textiles, apparels and footwear. All the states have agreed to the roll out from July 1, bringing certainty to the implementation of the new regime as scheduled.
In a major relief to traders and businessmen across the country, the GST Council has increased the limit on input tax credit to 60% against excise payments from 40% earlier on items with tax rates at 18% and above without excise payment receipts, bringing some respite on sale of inventories stocked up before the implementation of the new tax regime on July 1.
The input tax credit refund against excise on items with tax rates below 18% would remain at 40% of the total GST liability. Further, the GST council also ruled that entire 100% input tax credit against excise can be availed on high-value items above Rs 25,000 with a chassis number. It must be noted that the input tax credit refund is already at the full value in cases where the excise payment receipt is available.