PM Modi says 99% of items to be under GST rate of 18% or less

New Delhi, Dec 19: Prime Minister Narendra Modi on Tuesday said the government hopes to bring 99 per cent of the items now subjected to the Goods and Services Tax (GST) to be in the low end of the tax bracket.

Speaking at a function in Mumbai on Tuesday, PM Modi indicated that 28 per cent slab of GST would only be restricted to a few select items, such as luxury goods. He said: "Today the GST system has been established to a large extent and we are working towards a position where 99 per cent will attract the sub-18 per cent GST slab".

"All things related to common man will be 18% or below that... 99% articles will be 18% or below 18% rate," he said, adding that GST should be made as simple and as convenient as possible. That could mean cement, marble, air conditioners, dishwashers and other items becoming cheaper.

The proposal may be put up at the GST Council meeting on December 22. "I have already given my suggestion to the upcoming GST Council because that (rate) is decided by all the states together," Modi said in his address at a function in Mumbai.

Only 1% or 0.5% of luxury items will remain outside the 18% slab, PM said, flagging planes, expensive cars and cigarettes that will likely continue to be levied at 28%. There are about 40 broad categories of goods that are in the top GST slab. They include cement, marble, tyres, air conditioners, digital and video cameras, monitors and projectors and video games consoles.

Modi said the GST system had by and large settled into place but the government will continue to make changes as required in the interests of the common man.

"We have reached a point where 99% articles can be brought in the 18% or less than 18% bracket and we are progressing in that direction," Modi said.

Prior to the implementation of GST in July last year, registered enterprises numbered 6.6 million. That has risen to 12 million, Modi said. "Even developed countries find it difficult to implement small tax reforms," he said, acknowledging the contribution of everyone in making the reform a success.