The middle class focuses on GST rate reductions, widely requested sanitary napkins are exempt

Union Finance Minister Piyush Goyal at the press conference after the GST Council meeting Saturday. (Source: Twitter / @ PiyushGoyal)

The Goods and Services Tax (GST) Council at its 28th meeting on Saturday approved tariff cuts for 88 consumer-focused items such as cosmetics, refrigerators, washing machines and small screen TVs. the widely requested exemption on sanitary napkins.

The tax has also been reduced to zero for marble and stone idols, rakhis and sal leaves. The Council announced a quarterly rebate and monthly tax payments for businesses whose annual business turnover would reach 5 crores, against a threshold of 1.5 crore, which should benefit 93% of taxpayers GST registrants.

"The decisions of the GST Board were guided by simplification, rationalization … Each state wanted the rates of these products to be lowered for the benefit of middle-income households … It was also decided that the Council on Job Creation and Economic Growth, "said Finance Minister Piyush Goyal after chairing the GST Board meeting, his first after taking over the portfolio.

Read | Sanitary towels exempt from the GST, tax reduction on television, shoes

Consumer goods, strongly affected by the demonetization, could benefit from lower rates, which could have an impact on the three-year legislative elections.States of the heart and the general elections thereafter.The good monsoon inspired forecasts of a sustained recovery in demand rural and urban, and GST rate cuts could catalyze a feeling of well-being before the festival season

. between July 27 and the date of entry into force of July 27, it is estimated to be about Rs 8,000-10,000 loss of revenue, cuts in the peak of 28% alone costing the same. chessboard about 6,000 crores of rupees.

Goyal impact on revenues would be "marginal" compared to the expected increase in compliance due to lower GST rates. This is the fifth cycle of rate rationalization undertaken by the GST Board since the introduction of the various GST installments.

Kerala Finance Minister Thomas Isaac described these decisions as "undemocratic". cuts, it would have been done for the necessities. "It is very unfortunate that the GST Board, without circulation in the agenda notes, decided to reduce the tax on 18 consumer durables like television, refrigerator, etc. from 28 to 18 % disregarding income and equity implications, non-democratic and non-egalitarian ", Isaac posted on Twitter

Read | "Thank you, but for a long time": Twitterati reacts to the removal of the GST on sanitary napkins

"If anyone thought that GST revenues were high enough to warrant a rate cut, they should have reduced rates. Maybe even made them free of tax. But the 30-40% reduction in the GST for durable goods only betrays the clbad bias of developers, "said Issac, who did not attend Saturday's meeting.

Articles for the GST rate has been lowered Vacuums, appliances such as water heaters, shavers / hair dryers, paints and varnishes, water coolers, perfumes, cosmetics and batteries lithium-ion batteries, used to charge electric vehicles are between 18% and 18% .The rate for fuel cell vehicles has been reduced from 28 to 12 percent with the removal of compensation. issued for certain services, including the reduction of the GST rate from 18% to 5% on the supply of electronic books for which the print version exists.

GST on hotel accommodation services will now be pbaded to the transaction value 28% GST is charged if the hotel room rate is more than Rs 7,500. and 12,000 rupees between 1,000 rupees and 2,500 rupees.

Footwear with a retail selling price of less than Rs. those who cost more than 1,000 rupees will continue to attract 18%. Currently, 5% GST is collected on shoes up to Rs 500, and 18% on more expensive pairs.

Council also lowered the GST rate on ethanol% The ministerial panel on sugar and ethanol recommended reducing it to 12%; Tax experts welcome rate cuts and simplification of the return reporting process, but point out that the exemption for sanitary napkins can not lead to lower prices as manufacturers will not be able to claim input tax credit. When asked, Goyal said the calculations showed that the input tax credit on sanitary napkins was about 3-4 percent, and the government would insure a lower price for the final product.

In July 2017, the government had argued to lower the 12% GST rate on sanitary napkins by citing high tax rates of 18% and 12% on inputs. The government's publication also stated that "zeroing the GST rate on sanitary napkins … would result in ITC's complete denial to domestic manufacturers of sanitary napkins and zero-rate imports." This will make domestically produced sanitary towels extremely disadvantaged compared to imports, which will be zero-rated. "

The Council also approved Saturday amendments to the GST laws that include increasing the threshold of turnover for resellers of composition .1.5 crore from Rs 1 crore as well as making them eligible to take the benefit if they provide services (other than food services) for a value not exceeding 10% of the prior year's business turnover, or Rs 5 lakh, according to

The reverse charge mechanism, which was already suspended until September 30 of this year, was postponed until September 30, 2019. The Board also discussed the report of the committee on the creation of an ecosystem for connectivity routi it was decided to connect RFID tags to the GST network.

The next meeting of the Council will take place on 4 August, during which issues related to the MSME sector will be discussed, as well as incite digital transactions via RuPay cards and the BHIM app. Companies will have one last chance until August 31 to migrate to the GST regime, and late fees will be removed, said Goyal

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