GST rate on mobile phones will be hiked to 18 per cent while that on maintenance repair overhaul (MRO) 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.
With regard to GST rates, the minister said there are four sectors — footwear, textiles, fertiliser and mobile phones — which face inverted duty structure wherein inputs are taxed at a higher rate than finished products.
“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.