Piyush Goyal during the GST Council Meet
The GST Council on Saturday cut tax rates on 88 items, including footwear, refrigerator, washing machine and small screen TV, while the widely demanded sanitary napkins have been exempted from the levy.
The highest tax bracket of 28 per cent has been rationalised further with rates on daily-use items like perfumes, cosmetics, toiletries, hair dryers, shavers, mixer grinder, vacuum cleaners, lithium ion batteries, being lowered to 18 per cent. The revised tax rates will come into effect from July 27.
"Every state wanted that the rates on these items be lowered so that the middle income households are benefitted ... It has also been decided that the GST Council will rise above revenue consideration and focus more on job creation and economic growth," Finance Minister Piyush Goyal said.
Refrigerator, washing machine, small screen TV, storage water heaters, paints and varnishes, will henceforth attract 18 per cent GST as against 28 per cent at present.
Tax rate on ethanol has been slashed to 5 per cent from 18 per cent at present.
Footwear costing up to Rs 1,000 will now attract 5 per cent GST. So far, footwear up to Rs 500 attracted 5 per cent GST, and those having retail sale price of over Rs 500 attracted 18 per cent rate.
In a major relief to women, the GST Council on Saturday decided to exempt sanitary napkins from the ambit of the Goods and Services Tax.
“Sanitary napkins will be exempted from Goods & Services Tax,” Interim Finance Minister Piyush Goyal announced while addressing a press conference in Delhi following 28th meeting of GST Council.
The demand to exclude sanitary napkin from the GST has been going on for a long time. To drive the point home, a group of students from Gwalior launched a campaign in January this year. The students sent sanitary napkins with the message written on them to Prime Minister Narendra Modi and urged him to exempt the taxes levied on the product and make it free of cost.
Apart from sanitary napkins, deities made of stone, marbles and woods, commemorative coins circulated by the RBI or the government, fortified milk etc have also been from the GST.
Meanwhile, GST on products like lithium-ion batteries, vacuum cleaners, food grinders, refrigerators, and cosmetics have been reduced from 28 per cent to 18 per cent. GST on handbags, jewellery box, wooden box for paintings, handmade lamps etc. have also been reduced to 12 per cent.
The GST rate cuts announced on Saturday will come to effect from July 27.
The revised amendments are also a major relief for the taxpayers. Under the revised norms, taxpayers with turnover up to Rs 5 crore will now find it easier to file returns. While they will continue to pay GST monthly, they will only file returns once a quarter.93 percent of taxpayers will file GST returns quarterly, Goyal said. The exemption limit for traders in Assam, Arunachal Pradesh, Himachal Pradesh and Sikkim has been increased from Rs 10 lakh to 20 lakh. Taxpayers who are yet to register under GST will be given on final extension till August 31 and any late penalty would be waived off.
However, no decision was made on sugar cess. The finance minister said that they would be discussed in the next meeting. The 28th GST council cleared a total of 46 amendments which will be passed in the Parliament.
The GST Council will meet next on August 4 to discuss the problems faced by small traders and businesses and entrepreneurship. The meeting will be completely focussed on the Micro Small and Medium Enterprises (MSME) sector, Goyal said.
Piyush Goyal took to Twitter saying that the meeting discussed how GST, as an embodiment of cooperative federalism, has brought transparency and honesty, and its implementation benefits 125 crore Indians as it has brought a reduction in prices of products and services.
Here are the details of key Tax Rate Changes
I. Items exempted from GST
- Sanitary pads
- Deities made of stone, marble or wood
- Raakhis, without any precious metals
- Raw material used in brooms
- Commemorative coins circulated by the RBI or government
- Saal leaves
- Fortified milk
II. From 12 per cent to 5 per cent reduction
- Handloom dari
- Fertiliser grade phosphoric acid
III. From 28 per cent to 18 per cent reduction
- Lithium-ion batteries
- Vaccum cleaners
- Food grinders, mixers
- Shavers, hair clippers
- Storage water heaters
- Electric smoothing irons
- Water cooler
- Ice cream freezer
- Refrigerators
- Hand dryers
- Cosmetics
- Perfumes, Scent
- Paint, Varnishes
IV. GST slashed from 18% to 12%
- Handbags including pouches and purches, jewellery box
- Wooden frames for painting, photographs, mirrors etc
- Art ware of cork
- Stone art ware, stone inlay work
- Ornamental framed mirrors
- Glass statues (other than those of crystal)
- Glass art ware (including pot, jars, cask, vase)
- Art ware of brass,copper/copperalloys, electroplated with nickel/silver
- Aluminium art ware
- Handcrafted lamps
_ Bamboo flooring
V. GST slashed to 5 per cent
- Ethanol
- Footwear costing up to Rs 1000
- Solid bio furl fabrics
- Chenille fabrics
- Handloom dari
- Phosphoric acid (fertilizer grade only)
- Knitted cap having retail sale value not exceeding Rs 1000
- Handmade carpets and other handmade textile floor coverings
- Handmade lace
- Hand-woven tapestries
- Hand-made braids
- Toran
VI. Other key changes
- GST on ethanol sold to oil companies for blending with petrol and diesel reduced to 5 per cent from 18 per cent earlier.
- GST on imported urea reduced to 5 per cent.
- GST on e-books reduced to 5 per cent from 18 per cent.
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