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What is it?
The Goods and Services Tax (GST) Council, at its 28th meeting, reduced to 50 items, including commonly used products like sanitary pads, and white goods like washing machines, refrigerators and kitchen appliances. Sanitary pads have been exempt from the GST – it had a 12% tax rate earlier. White goods have their tax rates reduced to 18% from the earlier 28%.
As of interest to the common man, the Council decided to pay $ 5,000 at 5%, where earlier this slab was reserved for footwear up to a value of ₹ 500.
The Council also decided to provide the Council with a decision on the basis of the transaction. on the returns filing process. Assesseses with an annual income of less than ₹ 5 crore can now file their returns on a quarterly basis. This affects more than 90% of GST filers, and has been seen as a welcome move for small businesses. In addition, the Council finalised two simplified forms – Sahaj and Sugam – for the large filers.
How did it come about?
few items in the 28% bracket as possible. The simplification of the return filing procedures is also the following in a series of steps taken by the Council. manner.
Why Does It Matter?
The decision to free sanitary pads from the GST has been seen as a women-friendly and progressive move that will greatly reduce their price. This is an incorrect badessment, given how the GST is structured. Products exempt from the GST are also ineligible for input tax credits. So, while the output tax has been slashed, the input tax burden has increased.
With the two main manufacturers of pads in India, they want to maintain their profit margins at the same level as before cut was announced, the decrease in price for the consumers is likely to only be a few rupees.
Further, the government deflected the question of the impact of the tax burden on the market. First, the tax relief will result in a 7-8% price. Second, the demand for these products is relatively inelastic in the sense that they are not cheaper. You will buy it only as many times as you need.
That aside, what the rate cuts are done to the 28% rate. This is a welcome move, and a big step towards possibly removing the slab altogether, thereby further simplifying the GST.
What next?
The GST Council takes up new issues at each of its meetings. Looming over the agenda is the issue of petroleum products and when they will be included in the GST. Reports say the Council will take this up in a staggered manner, then consider a new gas turbine, then aviation turbine fuel, and then possibly petrol and diesel.
The return filing process is also in progress for the Council of Europe finalized the manner in which the invoice-matching system can be incorporated into the system. Without invoice matching, the GST is still incomplete.
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