Tax on sanitary pads cut from 12% to zero; tax on refrigerators, washing machines, vacuum cleaners, water heaters, TVs down from 28% to 18%
Conceding a year-long demand, sanitary napkins were yesterday exempted from GST, as the Council reduced tax rates on an array of daily use appliances and products. Millions of consumers, small traders and artisans will benefit from the move ahead of the festival season. While GST tax on sanitary pads was cut from 12 per cent to zero, rakhis were exempted from the tax, Finance Minister Piyush Goyal told reporters.
Among items on which GST was reduced include footwear, small television sets, water heater, electric ironing machines, refrigerators, lithium ion batteries, hair dryers and food appliances. The value limit of footwear was enhanced from R500 to Rs 1,000 for 5 per cent rate. The council also approved the proposal to allow quarterly return filing for taxpayers with a turnover of upto R5 crore, a move that will benefit nearly 93 per cent of tax assessees as they would now be required to file returns only once in three months.
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Piyush Goyal
A new set of simpler return filing forms are also in the works that would be finalised soon, Goyal said. Goyal said the GST Council has decided to focus on issues concerning the broader economy such as job creation rather than only on revenue targeting. All decisions will be effective from June 27.
Key tax rate changes
Exempt from GST
> Sanitary pads
> Deities made of stone, marble or wood.
> Raakhis
> Raw material in brooms.
> Commemorative coins circulated by the RBI or government.
> Saal leaves
> Fortified milk
From 28% to 18%
> Lithium-ion batteries
> Vacuum cleaners
> Food grinders, mixers
> Shavers, hair clippers
>Storage water heaters
> Electric smoothing irons
> Water cooler
> Refrigerators, television
> Cosmetics
> Perfumes
> Paint, varnish and leather
From 12% to 5%:
> Handloom dari
> Fertiliser grade phosphoric acid
Other changes:
> GST on E-books reduced to 5% from 18%
> GST on ethanol sold to oil companies reduced to 5%
> GST for hotels to be charged on actual price that the customer pays, not on the declared tariffs.
People’s take
Faye DSouza@fayedsouza: The #GST council has abolished tax on sanitary napkins! Thank you to the FM and the gst council. Thank you to the women who fought this battle for over a year!
Harsh Sanghavi@sanghaviharsh:Now that’s what I call an incredible move. Many thanks to our Government for taking a decision to Exempt Sanitary Napkin from GST, which not only empower women, but also encourage healthy nation.
TCA Sharad Raghavan @SharadRaghavan: Everybody thinks this is a pro-woman, progressive move. The fact is, exempt items can’t avail of input tax credits, which means they’ll be more expensive to manufacture, which in turn means pads will get become costlier.
Rate cuts to cost crores: Assam FM
Himanta Biswa Sarma, finance minister of Assam, has said that reducing the rates of goods from 28 per cent to 18 per cent would result in a revenue loss of R6,000 crore to the exchequer.
Key takeaways
> 28% category may be on its way out
> Policy makers are realising that simplicity is a great virtue
> Industry will have to be mindful of anti profiteering provisions
> Expect administrative tightening in next few months
What officials say
Sushil Kumar Modi @SushilModi: 93% of GST dealers will now be exempted from filing monthly returns. Monthly payment & Quarterly return only.
Manohar Parrikar @manoharparrikar: A welcome decision to exempt sanitary napkins from GST. An important step by @narendramodi Govt. that is vital to the health and well-being of women and girls.
Supriya Sule@supriya_sule: Thankful to GST Council for removing Sanitary Napkins from the purview of GST. The Womens Wing of @NCPSpeaks had protested against the GST on Sanitary Napkins. This is a success of all the Women in our Nation.
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