Exemption on cards for cancer drugs

The Goods and Services Tax (GST) Council, convening for two days starting Wednesday to take up the much-awaited rationalisation of the multiple-rate indirect tax regime announced by Prime Minister Narendra Modi on Independence Day, is likely to consider GST exemptions for around 36 cancer-fighting drugs, a new price-based levy for cigarettes, and fresh price thresholds for footwear and apparel taxes.

- MONIKA YADAV

The Council, that includes representatives from all states, is slated to discuss the Centre's proposal to do away with the 12 per cent and 28 per cent GST rates, retain the extant rates of 5 per cent and 18 per cent, and introduce a new 40 per cent special rate for sin and luxury goods.

If states concur with this formulation, over 250 items that currently face a 12 per cent levy are likely to be reclassified, with around 223 of them being moved to the 5 per cent bracket, and the rest to the 18 per cent bracket. Items likely to move from the 12 per cent slab to 5 per cent include marble and granite blocks in uncut form, and renewable energy equipment such as solar power generators, solar cells, wind energy items and solar modules.

Similarly, nearly 30 items from the 28 per cent tax bracket, may be shifted to an 18 per cent levy, with the higher 40 per cent tax being imposed on about 10 items. Some of the items in the 28 per cent bracket that are likely to benefit from a rate reduction, are auto parts and tyres, air-conditioners, televisions, motorcycles, leadacid batteries, rowing boats and even Garments and apparel as well as footwear priced above ₹2,500 are likely to attract 18 per cent GST, while those below this threshold are expected to be taxed at 5 per cent, sources said. Currently, all kinds of footwear attract 18% GST, barring casual footwear which is taxed at 12 per cent if priced below ₹1,000.

Similarly, apparel with an actual selling price over 1000 is taxed at 12 per cent, and clothes with a lower price face 5% GST.