GST council meet: Sanitary napkins exempted from GST

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According to media reports, the move to slash levies could cost the government up to 1% of its budgeted tax target. The government has already widened its deficit goal for the current fiscal year to 3.3 per cent of gross domestic product from 3 per cent, putting pressure on bond yields.

"The latest decision by [the] GST Council to exempt GST on sanitary pads is a welcome step", Bipin Sapra, tax partner, EY India told The Hindu.

The 28th GST Council meet has chose to fully exempt sanitary napkins from GST, from the existing 12 percent.

The Focus of GST Council Meet was completely on Simplification and rationalisation. The people who buy washing machines, paints and other such things will reap the benefits of the rate cuts. It also approved changes to GST laws to reduce the compliance burden on taxpayers as well as plug loopholes in the existing laws. Jaitley, and the press release, made the following argument: Before GST, sanitary napkins were effectively taxed at more than 13%, and they had been brought down to 12% under GST. The decision had caused an uproar as it brought questions as to the government would place a tax on pads since that means they consider it to be of something luxurious when it is a necessity, like condoms which was excluded from tax payment.

"Ideally, reduction of GST to 5% tax could have helped the companies to recover the part of the input tax credit".

Consumer appliance maker Usha International's CEO, Dinesh Chhabra, appreciated the reduction in the GST rates - from 28 per cent to 18 per cent - on food grinders, mixers, storage water heaters, water coolers, water heaters, electric ironing machines, among others.

Handloom products such as knitted caps priced below Rs1,000 will now attract a lower GST rate of 5 per cent.

There has been no agreement on the issue as part of Brexit negotiations and the higher tax now remains in force in the UK.

The reverse charge mechanism has been deferred by a year to September 30, 2019, the minister said, while adding that the businesses with turn over of up to Rs 5 crore can file quarterly returns. Around 93% traders will get benefitted.

Hotel industry has been given major relief by providing that the rate of tax on accommodation service shall be based on transaction value instead of declared tariff. On Saturday, the meeting also resulted in the clearing of some 46 amendments, which will be put up before parliament for approval. "The process being adopted impinges on states' rights".

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