Indian government reduces GST rates in 88 items, sanitary napkins exempted

The GST Council's 28th meeting was held here under the Chairmanship of Piyush Goyal, Union Minister for Railways,Coal, Finance & Corporate Affairs, where a decision was taken to lower the tax slab on products such as paints, leather goods, bamboo flooring, stoves, televisions and washing machines from the highest rate of 28 percent to 18 percent.

The government also announced an exemption of sanitary napkins, rakhi from the GST, an attempt made by Prime Minister Narendra Modi-led government before the 2019 general elections when it will seek its second term to power.

Sanitary napkins were earlier taxed at 12%.

The new tax rates will be applicable from July 27.

Speaking on the government's move, Goyal tweeted: "GST Council today approved reduction in rates of 88 goods and services. Money in the hands of all sections of society - the poor, households, women, farmers and senior citizens."

Union Finance Minister Arun Jaitley tweeted: "#GSTCouncil in the 28th meeting has continued its endeavour to simplify processes, further rationalise tax rates, & enhance cooperative federalism. Today’s decisions of the Council will go a long way in pushing productivity upward. "

GST rates are given below:

GST rates reduction on 28% items:

28% to 18%

Paints and varnishes (including enamels and lacquers)
Glaziers’ putty, grafting putty, resin cements
Refrigerators, freezers and other refrigerating or freezing equipment including water cooler, milk coolers, refrigerating equipment for leather industry, ice cream freezer etc.
Washing machines.
Lithium-ion batteries
Vacuum cleaners
Domestic electrical appliances such as food grinders and mixers & food or vegetable juice extractor, shaver, hair clippers etc
Storage water heaters and immersion heaters, hair dryers,  hand dryers, electric smoothing irons etc
Televisions upto the size of 68 cm
Special purpose motor vehicles. e.g., crane lorries, fire fighting vehicle, concrete mixer lorries, spraying lorries
Works trucks [self-propelled, not fitted with lifting or handling equipment] of the type used in factories, warehouses, dock areas or airports for short transport of goods.
Trailers and semi-trailers.
Miscellaneous articles such as scent sprays and similar toilet sprays, powder-puffs and pads for the application of cosmetics or toilet preparations.

28% to 12%:

Fuel Cell Vehicle. Further, Compensation cess shall also be exempted on fuel cell vehicle.
Refund of accumulated credit on account of inverted duty structure to fabric manufacturers:Fabrics attract GST at the rate of 5% subject to the condition that refund of accumulated ITC on account of inversion will not be allowed. However, considering the difficulty faced by the Fabric sector on account of this condition, the GST Council has recommended for allowing refund to fabrics on account of inverted duty structure. The refund of accumulated ITC shall be allowed only with the prospective effect on the purchases made after the notification is issued.

GST rates have been recommended to be brought down from,-

18%12%/5% to Nil:

Stone/Marble/Wood Deities
Rakhi [other than that of precious or semi-precious material of chapter 71]
Sanitary Napkins,
Coir pith compost
Sal Leaves siali leaves and their products and Sabai Rope
PhoolBhariJhadoo [Raw material for Jhadoo]
Khali dona.
Circulation and commemorative coins, sold by Security Printing and Minting Corporation of India Ltd [SPMCIL] to Ministry of Finance.

12% to 5%:

Chenille fabrics and other fabrics under heading 5801
Handloom dari
Phosphoric acid (fertilizer grade only).
Knitted cap/topi having retail sale value not exceeding Rs 1000

18% to 12%:

Bamboo flooring
Brass Kerosene Pressure Stove.
Hand Operated Rubber Roller
Zip and Slide Fasteners

18% to 5%:

Ethanol for sale to Oil Marketing Companies for blending with fuel
Solid bio fuel pellets

Rate change made in respect of footwear

5% GST is being extended to footwear having a retail sale price up to Rs. 1000 per pair
Footwear having a retail sale price exceeding Rs. 1000 per pair will continue to attract 18%

GST rates have been recommended to be brought down for specified handicraft items [as per the definition of handicraft, as approved by the GST council] from,-

18% to 12%:

Handbags including pouches and purses; jewellery box
Wooden frames for painting, photographs, mirrors etc
Art ware of cork [including articles of sholapith]
Stone art ware, stone inlay work
Ornamental framed mirrors
Glass statues [other than those of crystal]
Glass art ware [ incl. pots, jars, votive, cask, cake cover, tulip bottle, vase ]
Art ware of iron
Art ware of brass, copper/ copper alloys, electro plated with nickel/silver
Aluminium art ware
Handcrafted  lamps (including panchloga lamp)
Worked vegetable or mineral carving, articles thereof, articles of wax, of stearin, of natural gums or natural resins or of modelling pastes etc, (including articles of lac, shellac)
Ganjifa card

12% to 5%:

Handmade carpets and other handmade textile floor coverings (including namda/gabba)
Handmade lace
Hand-woven tapestries
Hand-made braids and ornamental trimming in the piece
Toran