GST Council reduces tax rates on more than 50 items

GST Council reduces tax rates on more than 50 items

GST Council reduces tax rates on more than 50 items

Delhi Deputy Chief Minister Manish Sisodia and Maharashtra Finance Minister Sudhir Mungantiwar announced this on Saturday after a meeting of the GST Council. Sanitary napkins were earlier under the 12 percent tax slab.

While the GST rate on sanitary pads was cut from 12% to zero, rakhis were exempted from the tax as well, Finance Minister Piyush Goyal told reporters here.

In January this year, a group of students from Gwalior had launched a campaign by writing messages on sanitary napkins to Prime Minister Narendra Modi, urging him to exempt the taxes levied on the product and make it free of cost.

The Council brought down tax rates to 18 per cent from 28 per cent on 15 items, including vacuum cleaners, washing maching, 68 cm (27 inch) TV, fridge, laundry machines, paints and varnishes.

"GST Council today approved reduction in rates of 88 goods and services". If the sanitary napkins are technically under GST, but taxed at 0%, manufacturers will still be able to get input tax credits. The new rates will kick off from July 26.

GST Council also allowed businesses with turnover of up to Rs 5 crore to file quarterly returns - a move which will benefit 93 per cent of the GST registered taxpayers. They will have to, however, pay taxes monthly.

The official, however, said that the revenue loss would be only notional as increased consumption and compliance would lead to more revenues to the exchequer. To counteract this double taxation, the government refunds the entire tax paid on the input - meaning the raw materials - as long as the producer has paid the output tax.

Sources, however, said the tax rate reduction is likely to cost around Rs 8,000-10,000 crore annually to the exchequer. Also a chance will be given till August 31 for businesses to migrate to the GST regime and late fee would be waived, Goyal said.

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.

A cloth merchant holds message papers to distribute as he attends a procession during a strike to protest the implementation of the Goods and Services Tax (GST) on textiles in Kolkata, India June 30, 2017. Around 90 consumer items, many of them popular with urban middle-class voters, will be impacted by the tax cut.

"I think all women will be happy to know that sanitary pads will now have 100 per cent exemption".

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