GST rates slashed on several products

GST rates slashed on several products

Sanitary napkins have been exempted from GST, Maharashtra Finance Minister Sudhir Mungantiwar said on Saturday after a meeting of the GST Council.

Sanitary napkins were taxed 12 percent tax under the one-year-old GST regime, which attracted serious criticism from various quarters.

Reactions flowed in from many women politicians after Finance Minister Piyush Goyal announced that sanitary pads are now 100 percent exempt from tax.

"The attention to reducing rates and simplification of filing of returns as well as widening of input tax credit shall certainly increase the compliance rate and add to revenue buoyancy", CII said.

It is expected that the council would decide on revision of tax rates on vending machines and lithium ion batteries among others.

Also idols made of stone, marble, wood, rakhi not embedded with stone, phool jhadu, sal leaves, too have been exempted.

While Goyal did not specify the quantum of revenue loss, Assam finance minister Himanta Biswa Sarma said the impact of rate cut on white goods alone would be '6,000 crore.

The new tax rates will come into effect from July 27.

GST rates slashed on several products
GST rates slashed on several products

Amar Tulsiyan, founder of Niine Movement, called Saturday's decision "a big win for everyone" in India, where, he said, 82 percent women and girls have no access to sanitary pads.

Tax filers with an annual turnover of less than Rs. 5 crore a year need to file returns on a quarterly basis while paying tax on a monthly basis.

Goyal asserted on the importance of reducing the tax on ethanol, as not only is it used for blending with petrol and diesel, it is also vital for the sugar industry, and will thus be very beneficial for the sugarcane farmers. They will have to, however, pay taxes monthly.

Sources, however, said the tax rate reduction is likely to cost around Rs 8,000-10,000 crore annually to the exchequer.

Deloitte India Partner M S Mani said it would be logical to expect that once the GST collections after the recent reductions stabilise, the remaining items such as televisions of all sizes, dishwashers, digital cameras, air conditioners could be considered for an 18 per cent rate.

The council at its next meeting on August 4 will discuss concerns of the small and medium enterprises and steps to incentivise digital payment.

These amendments will now be placed before Parliament and the legislature of the state and Union territories for carrying out the amendments in the respective GST acts, the minister said. In its meeting in November past year, the Council had reduced rates in over 178 items in the 28 per cent tax bracket.

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