GST council reduces tax rates on several items

23 Jul 2018 Evaluate

Giving major relief to the common man, the Goods and Services Tax (GST) at its 28th meeting, has reduced tax rates on several products including refrigerators, washing machines and small televisions, which would now be taxed at 18 percent, down from the current 28 percent. Apart from this, it also decided to exempt GST on sanitary napkins, rakhis, fortified milk and idols of deities made of stone, marble and wood. The new tax rates will be enforced from July 27.

The highest tax bracket of 28 percent has been rationalised further with rates on daily-use items like perfumes, cosmetics, toiletries, hair dryers, shavers, mixer grinder, vacuum cleaners, lithium ion batteries, being lowered to 18 percent. Refrigerators, small televisions, of up to 25 inches, lithium ion batteries, vacuum cleaners, domestic electrical appliances, such as food grinders, mixers....storage water heaters, immersion heaters, hair dryers, hand driers, electric smoothing irons, among others have been brought to the 18 percent slab.

Footwear costing up to Rs 1,000 will now attract 5 percent GST. So far, footwear up to Rs 500 attracted 5 percent GST, and those having retail sale price of over Rs 500 attracted 18 percent rate. Tax rate on ethanol has been slashed to 5 percent from 18 percent at present. Besides, tax rates on worked up Kota stone, sand stone and similar quality of local stones were cut from 18 to 12 percent, with the purpose of avoiding classification disputes. Beside, tax rate on handicraft items such as handbags, pouches and purses, jewellery box, wooden frames of paintings and photographs among others have been brought under the 12 percent slab, from 18 percent.

GST on handmade carpets and handmade textile floor coverings has been reduced from 12 percent to 5 percent. The tax rate on supply of e-books has been cut to 5 percent from 18 percent. The hotel industry too has been given major relief as tax rate would be based on the room tariff paid and not the published tariff. Earlier, there was a lack of clarity on the issue causing a lot of trouble for consumers booking hotels with 'declared tariffs' of Rs 7,500 and above which incurred 28 percent GST. While hotels with tariff below Rs 1,000 are exempted from GST, those with tariff between Rs 1,000-2,500 are taxed at 12 percent, those between Rs 2,500-7,500 at 18 percent, and above Rs 7,500 at 28 percent.

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