GST rate cut on 88 items

The GST rate cut as announced by finance minister Piyush Goyal during the GST Council meeting on 21 July, comes into effect on Friday. About 88 items—from refrigerators and washing machines to toiletries and cosmetics—are set to get cheaper as they were moved from the highest tax bracket of 28% to 18%. 

“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.

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.

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.

Here is a list of all the GST rate cut on 88 items.

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.