At last, sanitary pads exempt from GST

New Delhi: In a major relief for consumers, the Goods and Services Tax (GST) Council on Saturday decided to slash tax rates on several consumer durables like televisions, air conditioners, refrigerators, washing machines, video games, trailers and inverters. Interim Union Finance Minister Piyush Goyal also announced that sanitary napkins are now 100 per cent exempt from tax, from the previous 12 per cent. 

A high GST rate on sanitary napkins imposed last year had triggered howls of protest from consumer activist groups. The new rates will come into effect from July 27.  In a mini-budget of sorts, the GST council significantly pruned the list of items placed in the highest tax slab of 28 per cent, demonstrating the Centre and states’ growing confidence in the new system that seeks to unify India into one common national market. 

Many handicraft items such as stone, marble and wooden deities, rakhis without precious stones, brooms and commemorative coins have been made fully exempt from GST, Goyal said. Fortified milk has also been fully exempted from GST.

Handloom items such as knitted caps priced below Rs 1,000 will now attract a lower GST rate of 5 per cent. All leather items will now attract a GST rate of 18 per cent, while footwear priced below Rs 1,000 will be taxed at 5 per cent.

Taxes on handbags, jewellery boxes, wooden photo frames, stone art wear, ornamental frame mirrors, glass art ware, aluminium art ware and handmade carpets have been cut to 5 per cent from 12 per cent. In a boost for the textile industry, unclaimed input tax credit will henceforth be refunded to firms.

GST on hotel room rates will be now taxed at “declared tariffs”. The GST rate on bamboo flooring, hand-operated rubber rollers and zip fasteners have been cut to 12 per cent from 18 per cent, while the GST rate on ethanol has been to cut 5 per cent from 18 per cent, a move aimed at encouraging higher ethanol blending in petrol and diesel.

The biggest rate cuts, however, came in white goods. GST rates on several consumer goods including refrigerators, lithium batteries, vacuum cleaners, grinders, mixers, food processors, water heaters, hair dryers, water coolers, ice cream freezers, scents, perfumes, powder puffs, cosmetics, and electric ironing machines have been cut to 18 per cent from 28 per cent.