GST rate cut: From diamonds to used cars, here's full list of revised items

The changes will be effective from January 25; 15 states to start intra-state e-way bill from February 1

Two weeks ahead of Budget 2018, the GST Council on Thursday cut rates on 83 employment-oriented goods and services, in a bid to encourage greater compliance as revenues have dipped since the landmark reform was announced in July. The panel, headed by Finance Minister Arun Jaitley and comprising representatives of all states, at its 25th meeting decided to reduce tax rate on 29 items and 54 categories of services with effect from January 25. Businesses have raised concerns about high rates of taxation and cumbersome processes in GST, billed as India's biggest tax reform in 70 years.

The goods on which GST will be lowered include biofuel-run buses, used motor vehicles and diamonds and precious stones.

Here's the complete list:

List of goods on which GST rate recommended for reduction from 28% to 18%Old and used motor vehicles on the margin of the supplier, subject to the condition that no input tax credit of central excise duty/value added tax or GST paid on such vehicles has been availed by him.

Buses, for use in public transport, which exclusively run on bio-fuels.

List of goods on which GST rate recommended for reduction from 18% to 12%

Sugar boiled confectionary Drinking water packed in 20 litters bottles Fertilizer grade Phosphoric acid Bio-diesel Bio-pesticides Bamboo wood building joinery Drip irrigation system including laterals, sprinklers Mechanical Sprayer

List of goods on which GST rate recommended for reduction from 18% to 5%

Tamarind Kernel Powder Mehendi paste in cones LPG supplied for supply to household domestic consumersList of goods on which GST rate recommended for reduction from 12% to 5%Articles of straw, of esparto or of other plaiting materials; basketware and wickerworkList of goods on which GST rate recommended for reduction from 3% to 0.25%Diamonds and precious stones

List of goods on which GST will not be charged

Vibhuti Parts and accessories for manufacture of hearing aids De-oiled rice bran

GST rate cut on services

In the services segment, government will cut taxes on transportation of crude, gasoil, gasoline, jet fuel and services relating to mining, exploration and drilling of oil and natural gas, among other things.

Admission to theme parks, water parks, joy rides, merry-go-rounds, go-carting and ballet will now be taxed at 18% instead of 28% and on common effluent treatment plans services from 18% to 12%.

GST collections have been coming down and reached a low of Rs 800 billion in November

While Thursday's GST Council meet concluded with some cause for cheer after 83 employment-oriented goods and services saw their rates cut and the Council was reported to be moving towards one form to file returns, indications and statements emerging from the meet also pointed towards a tougher stance on the government's part as far as GST compliance is concerned.

Looking to plug gaps and curb tax evasion, the government could bring in a reverse-charge mechanism (RCM) under the composition scheme. In fact, Finance Minister Arun Jaitley has gone as far as to reportedly threaten as much.

As reported earlier, GST collections have been coming down and reached a low of Rs 800 billion in November.

Owing to the lack of any anti-evasion measures in the current system, GST revenues are subdued. As reported earlier, the biggest concern emerged from the composition scheme, which yielded just Rs 3 billion in the first quarter from 1.7 million dealers.

ALSO READ: GST rate cut: From diamonds to used cars, here's full list of revised items

According to reports, over 40 of the law review committee's recommendations have also received in-principle acceptance. Subsequently, amendments would be moved during the second half of the Budget 2018 session.

Government to use two anti-evasion tools:

The government, according to reports, is set to tighten the noose. Here are the two tools it intends to use:

1) Reverse-charge mechanism: According to a Times of India report, the government aims to increase its GST collections by nearly 25 per cent. How will it achieve this feat? According to the report, the government will crack the whip on tax evaders from April by bringing back the RCM, which will serve as an anti-tax evasion measure and allow authorities to keep a track of transactions.

As reported earlier, the composition scheme yielded just Rs 3 billion in the first quarter from 1.7 million dealers. In fact, 500,000 persons have shown annual turnover less than Rs 500,000.