Feminine hygiene now tax-free in India; sanitary napkins out of GST net

GST rate cut Complete list of items that got cheaper including refigerator cosmetics and other things

Modi govt slashes GST rate on several products: Here're details

Millions of consumers, small traders and artisans will benefit from the move ahead of the festival season.

"Centre displayed extreme arrogance by not exempting sanitary napkins from GST over past one year!" A high GST rate on sanitary napkins had imposed previous year had triggered howls of protest from consumer activist and women groups.

"I think the 28% tax slab should be done away with", said Delhi Deputy Chief Minister Manish Sisodia, who holds the finance portfolio.

"Sanitary napkins to be exempted from Goods & Services Tax (GST)", said Finance Minister Piyush Goyal. Small handicraft items have also been exempted from GST.

Handloom items such as knitted caps priced below Rs 1,000 will now attract a lower GST rate of 5 percent.

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"This is a major step towards rationalising the 28 percent tax slab, which has been narrowed to only a few commodities in the past 13 months", Jaitley tweeted.

Tax rate on ethanol has been slashed to 5 percent from 18 percent at present.

► GST on imported urea reduced to 5%.

The tax rate on supply of e-books has been cut to 5 percent from 18 percent.

Other items for which the GST rate was cut include footwear, water heaters, electric irons, refrigerators, lithium ion batteries (used in electric vehicles), hair dryers, vacuum cleaners, food appliances and ethanol. This will surely impact the buyer-seller contractual relationships, said Archit Gupta, Founder and CEO, ClearTax.

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The rate cuts/clarifications will lead to a revenue loss of around Rs 8,000-10,000 crore, two senior government officials said.

The council also approved the proposal to allow quarterly return filing for taxpayers with a turnover of upto Rs 5 crore, a move that will benefit almost 93 percent of tax assessees as they would now be required to file returns only once in three months. The minister added that return forms would be simplified into different formats for composite dealers, business-to-business dealers and business-to-consumer dealers.

The council also deferred the implementation of reverse charge mechanism by another year and now it will come into force from October next year. The charge is applicable on a registered dealer, if he buys goods from a dealer not registered under GST.

However, the implementation of the revamped return filing process would take some time as corresponding changes would have to be made into the GST network, the minister clarified. The GST Council is likely to come up with more details on this regard, which will give relief to thousands of taxpayers under the new GST regime.

Mr Goyal said, GST council has cleared 46 amendments which will be passed in Parliament.

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