GST council exempts Sanitary napkins from taxation, removes several items from 28% tax bracket

After a year-long opposition, Maharashtra Finance Minister Sudhir Mungantiwar said today that sanitary napkins will be exempt from the GST, after a meeting with the GST council.

In the 28th meeting of the GST Council chaired by interim Finance Minister Piyush Goyal, the council also decided to reduce tax rates on several ‘general use’ items such as air conditioners, refrigerators, TVs and washing machines from. Tax rates on as many as 17 items in this category have been slashed from 28% to 18%.

Earlier, sanitary napkins were taxed at 12%, which have now been exempt from GST entirely. Small handicraft items like deities made of stone, marble and wood, Rakhi’s (barring those made from gold or which have precious/semi-precious stones), raw material used in brooms, Saal leaves and fortified milk have also been exempted from GST.

Rates for 17 goods including lithium-ion batteries, vacuum cleaners, food grinders/mixers, shavers/hair clippers, storage water heaters, electric smoothing irons, water coolers, ice cream freezers, refrigerators, hand dryers, cosmetics, perfumes, scents, paint and varnishes were cut by 10%, landing them in the 18% tax bracket as compared to the earlier 28% tax bracket. TV’s upto 68cm will be taxed in the 18% bracket too.

“I think the 28% tax slab should be done away with,” said Delhi Deputy Chief Minister Manish Sisodia, who holds the finance portfolio. “The issue is being unnecessarily dragged.”

Decisions taken today regarding tax rate reductions are estimated to cost the government nearly Rs 7,000 crores. The Union finance minister said the decisions would be applicable July 27, 2018 onwards.

In January this year, the council had revised tax rates on 29 items. However, the biggest rate rationalisation decision was taken by the council in November 2017, when over 200 items were brought in to lower tax brackets from 28% to 18%, and 12%.

The council will next meet on August 4 to discuss the problems faced by small trader and businesses, The meeting will be focussed entirely on the Micro, Small and Medium Enterprises (MSME) sector, said Goyal.

Key decisions taken today in the 28th GST Council meeting:

New GST Rates Items
0% Sanitary napkins, deities made of stone, marble or wood, Rakhi’s without any precious metals, raw material used in brooms, commemorative coins circulated by the RBI or govt, Saal leaves, fortified milk
18% all leather items, lithium-ion batteries, vacuum cleaners, food grinders/mixers, shavers/hair clippers, storage water heaters, electric smoothing irons, water coolers, ice cream freezers, refrigerators, hand dryers, cosmetics, perfumes, scents, paint and varnishes
12% Handicraft items, Handbags, bamboo flooring, jewellery box, wooden box for paintings, artware of glass, stone endeavour, ornamental framed mirrors, handmade lamps
5% Ethanol oil for oil companies, common-use foot ware valued upto Rs 1,000, handloom dari, fertiliser grade phosphoric acid

 

  • Hotels to be taxed on actual tariff basis not on declared tariff
  • GST rates cut to 18% for special purpose vehicles, work truck, trailers
  • GST on bamboo flooring put under 12% category
  • GST on imported urea reduced to 5%.
  • No decision on sugar cess, decision to be made in next meeting
  • Simpler return filing process approved. Quarterly tax returns for business turnover upto Rs 5 crore instead of monthly filings. However, tax payment is to be made monthly
  • Exemption limit for traders in Assam, Arunachal Pradesh, Himachal Pradesh, Himalaya, Sikkim, increased from Rs 10 lakh to 20 lakh
  • The GST council has cleared 46 amendments which will be passed in Parliament
  • RFID tags to  introduced with Goods and Services Tax Network (GSTN) for transporters to reduce harassment of transporters

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