28th meeting of the GST Council begins in New Delhi.
Sanitary napkins, which attract 12 per cent tax, and fortified milk, which was taxed at 18 per cent, have been exempt from the new indirect tax.
According to the Indian Express, Piyush Goyal was asked about this: "When asked, Goyal said calculations showed that input tax credit on sanitary napkins was about 3-4 per cent, and the government would ensure a lower price for the end product". This would mean there would be no input tax credit available, even though inputs in the production of sanitary napkins are taxed.
Among items on which GST was reduced include footwear, small televisions, water heater, electric ironing machines, refrigerators, lithium ion batteries, hair dryers, vacuum cleaners, food appliances and ethanol.
Other than sanitary napkins, rakhi too has been made GST free.
In a big relief to small traders, the GST Council on Saturday decided that those with a turnover of up to Rs 5 crore would have to file their returns only once in a quarter, while continuing to pay their taxes on a monthly basis. Now, there is much to be said about why MNCs dominate the sanitary pad market, the environmental costs of sanitary napkins and so on.
However, that raincloud is something we can only deal with once the move comes into effect from 27 July. He said, 100 items will be impacted by today's decision.
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.
Goyal asserted on the importance of reducing the tax on ethanol, as not only is it used for blending with petrol and diesel, it is also vital for the sugar industry, and will thus be very beneficial for the sugarcane farmers.
Sources, however, said the tax rate reduction is likely to cost around Rs 8,000-10,000 crore annually to the exchequer.
It's ridiculous to remember that Maneka Gandhi was ever of the opinion that 12 percent tax was alright as long as Self-Help Groups (SHGs) were encouraged to make their own biodegradable pads. "The decision was taken by the GST Council in which Congress-led governments are also involved". Also a chance will be given till August 31 for businesses to migrate to the GST regime and late fee would be waived, Goyal said. In its meeting in November past year, the Council had reduced rates in over 178 items in the 28 per cent tax bracket.