GST Council Meet: Here is what got cheaper and other major announcements

New Delhi, July 21: The 28th GST Council meeting chaired by interim Finance Minister Piyush Goyal on Saturday cut tax rates on 88 items, including footwear, refrigerator, washing machine and small screen TV. The revised tax rates will come into effect from July 27.

Apart from that the council has now put sanitary napkins under the exempted category. The rate reductions is estimated to cost government exchequer nearly Rs 7,000 crore.

Addressing the media, interim finance minister Piyush Goyal said several key decisions were taken at the meeting keeping in mind the interest of the nation as well as the middle class and small businessmen.

Here is what just got cheaper

Items exempted from GST

• Sanitary pads Rakhis, without precious material like gold, silver etc
• Marbles, stone or wood deities Raw material used in brooms
• Fortified milk
• Saal leaves
• Coir pith compost
• Circulation and commemorative coins

From 12 percent to 5 percent:

• Handloom dari
• Fertiliser grade phosphoric acid

From 28 percent to 18 percent:

• Washing machine
• Refrigerators, Freezers
• TVs up to 68cm
• Video games
• Vacuum cleaners
• Trailers and semi-trailers
• Mixer grinders
• Shavers & Hair dryers
• Water cooler
• Storage water heaters
• Lithium ion batteries
• Electric iron
• Paint

Other changes:

• GST on ethanol sold to oil companies for blending with petrol and diesel reduced to 5 percent from 18 percent earlier.
• GST on imported urea reduced to 5 percent.
• GST on E-books reduced to 5 percent from 18 percent.

Announcing that the new tax rates would be applicable from July 27, Goyal said traders with turnover up to Rs 5 crore will deposit the tax monthly but file returns just once a quarter.

He added that reverse charge mechanism had been stalled till September 30, 2019. Reverse charge is a mechanism where the recipient of the goods and/or services is liable to pay GST instead of the supplier.

The minister said return forms would be simplified into formats. "It will be different for composite dealers and for B2B or B2C dealers. It will be simplified into two formats - Sugaam and Sahaj," he said.

The exemption limit for traders in Assam, Arunachal Pradesh, Himachal Pradesh, Himalaya and Sikkim has been increased from Rs 10 lakh to 20 lakh.

In relief for transporters, the minister said "simplification is our priority". "Soon, we will link RFID tags with Goods and Services Tax Network (GSTN) for transporters. This will reduce their harassment."

Goyal also said that besides revenue collection, the GST council would focus on job creation and growth. He added that the council has cleared 46 amendments which will be passed in Parliament.

Though the rate reductions is estimated to cost the government exchequer nearly Rs 7,000 crore, the minister said, "100 items will be impacted by today's decision. Today's revenue forgone is good for our consumers & MSME participants."