GST rate on Mobile Phones and specified parts raised to 18 %

Speed Post News Network

New Delhi : The 39^th GST Council, which met under the Chairmanship of Union Finance & Corporate Affairs Minister Nirmala Sitharaman here on March 14, 2020, recommended for raising the GST rate on Mobile Phones and specified parts presently attracting 12% to 18%.

The recommendation of the Fitment Committee for calibrating the GST rate structure to correct the inverted duty structure on various items like Mobile phones, Footwear, Textiles and Fertilisers was placed before the GST Council for discussion. The Council had a detailed discussion on the matter.The meeting was also attended by Union Minister of State for Finance & Corporate Affairs Anurag Thakur besides  Finance Ministers of States & UTs and seniors officers of the Ministry of Finance.

The GST rate on all types of matches (Handmade and other than Handmade) has been rationalised to 12% (from 5% on Handmade matches and 18% on other matches). This would address the classification issues. This issue was deliberated earlier at the 37^th meeting and was pending for decision.

The GST Council also recommended for reducing GST rate on Maintenance, Repair and Overhaul (MRO) services in respect of aircraft from 18% to 5% with full ITC and to change the place of supply for B2B MRO services to the location of recipient. This change is likely to assist in setting up of MRO services in India. Domestic MRO will also get protection due to 5% tax paid under section 3(7) of the Customs Tariff Act, 1975 on most imported goods (sent abroad for repairs) as this tax is not available as credit.

It is proposed to issue notifications giving effect to these recommendations of the Council on April 1, 2020, according to a PIB release.