GST rate on mobile phones will be hiked to 18 per cent while that on maintenance repair overhaul services for aircraft will be lowered to 5 per cent with effect on April 1, Finance Minister Nirmala Sitharaman said on Saturday.
Briefing reporters after the 39th GST Council meeting, she said Infosys Chairman Nandan Nilekani made a detailed presentation for the transition into a better GST Network system and the requirement of hardware to enhance capacity for addressing the system related issues that are being faced by taxpayers in the IT system.Demand for more skilled manpower, better hardware to enhance capacity has been agreed to by the Council, she said.
The GST Council has decided that a completely enhanced capacity, a leaner system of GST Network with capacity enhance, staff response, better solutions, which were envisaged and proposed by Nilekani by January 2021, should be completed by July 2020, Sitharaman said.
“It was decided by the Council to raise the GST rate on mobile phones and specified parts which presently attract 12 per cent to be taxed at 18 per cent.
“For all other items where there is duty inversion, if there is a need to calibrate the rates for removing inversion, it was decided in one of the future meetings we will take up the issue,” she said.
Counterpoint Research Associate Director Tarun Pathak said, “This will impact the pricing and especially at a time when we are staring at uncertainty in the larger electronics supply chain due to coronavirus. An increase in price means a section of users will either go for second hand or even turn to grey market”.
The GST rate on handmade and machine-made matchsticks has been rationalised to 12 per cent from 5 per cent and 18 per cent respectively.The Council, chaired by Finance Minister, also deferred implementation of e-invoice and QR Code to October 1, 2020, from an earlier timeline of April 1.
The Council also decided that the interest for delay in payment of GST would be charged on the net cash tax liability with effect from July 1, 2017, and the law would be amended retrospectively.
