GST Rate Cut: Small Televisions, Lithium Ion Batteries to Become Cheaper

Posted July 23, 2018

After chairing the 28th GST Council meeting, interim finance minister Piyush Goyal on Saturday announced huge rate cuts on a number of commodities under the Goods and Services Tax (GST).

Sanitary napkins, which attract 12 per cent tax, and fortified milk, which was taxed at 18 per cent, have been exempt from the new indirect tax.

Addressing a presser, Goyal said, "After careful considerations and discussion with the state finance ministers, we (the GST Council) have made a decision to implement these changes for the welfare of the middle classes and small businesses and traders".

"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.

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Among several items on which GST was reduced include footwear, small televisions, water heater, electric ironing machines, refrigerators, lithium-ion batteries, hair dryers, vacuum cleaners, food appliances and ethanol.

Other than sanitary napkins, rakhi too has been made GST free.

"The GST Council cuts tax rates on an array of products".

Goyal said mandatory registration is required for only those e-commerce operators who are required to collect tax at source.

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The GST rate cut will come into effect from July 27. He said, 100 items will be impacted by today's decision. Foreign manufacturers, however, would not be subject to input taxes and will also not have to pay any GST, putting them at a massive advantage.

So far, businesses with turnover of up to Rs 1.5 crore were permitted to file returns quarterly.

Mr Goyal said, traders with turnover up to 5 crore rupees will deposit GST monthly but they have to file the returns quarterly.

"It would be ideal if only demerit goods are retained in the 28 per cent slab so that a gradual movement towards having fewer GST slabs can be initiated", Mani said. The GST on handbags, jewellery box, wooden box for paintings, glass art ware, ornamental framed mirrors, handmade lamps, wax, natural gum, iron and brass products have been reduced from 18 per cent to 12 per cent. 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.

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The council at its next meeting on August 4 will discuss concerns of the small and medium enterprises and steps to incentivise digital payment. With the stabilisation of revenue, the rate on many items were gradually reduced.