GST rates slashed on several products

Roman Schwartz
July 22, 2018

GST on 17 items used by middle class viz paints, refrigerators, washing machines, vacuum cleaners, storage water heaters, TVs up to 68 cm, mixer grinder, perfumes, cosmetics, shavers, vacuum was reduced from 28 to 18%.

The GST Council reduced tax rates on more than 50 items and exempted sanitary napkins, rakhis, stone, marble, wooden deities and Saal leaves from GST.

Speaking to reporters on the sidelines of the 28th GST Council meeting, the minister also said that tax on bamboo also has been slashed to 12 per cent. He said, GST on imported urea and ethanol sold to oil companies for blending with petrol and diesel has been reduced to 5 per cent. Mr Goyal said, return forms will be simplified into two formats - Sugaam and Sahaj. In what appeared to be a mini-Budget announcement to create a feel good factor, the council announced significant reductions in many goods and services.

In July 2017, the Ministry of Finance said that the tax on sanitary napkins was lower than before.

"The exercise was to ensure simplification and rationalization of GST and extend relief to the common man", Goyal told a news conference in New Delhi on Saturday evening. All leather items will now attract a GST rate of 18 percent, while footwear priced below Rs 1,000 will be taxed at 5 percent.

Asked about the revenue impact of the tax rate cut, Goyal said it will only be "nominal".

"I think the 28 percent tax slab should be done away with". The Council will discuss further on what further benefits could be given to them, he said.

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The council also deferred the implementation of reverse charge mechanism by another year and now it will come into force from October next year.

The Council has also chose to defer implementation of reverse charge mechanism (RCM) by a year to 30 September, 2019.

Fortified milk has also been fully exempted from GST.

"A deifinite timeline will be declared once we are informed about it by the GST Network", Goyal said.

EY Partner Abhishek Jain said: "Reduction in ethanol GST rate for use by oil companies is welcome as major petroleum products are outside GST, and this should help reduce their cost".

The issue of sugar cess was also reportedly taken up by the GST Council during its meeting today, but a definitive decision has not been reached yet.

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