GST Rate Cut: Small Televisions, Lithium Ion Batteries to Become Cheaper

Piyush Goyal

Interim finance minister Piyush Goyal

The tax rate on ethanol blended with petrol, footwear costing up to 1,000 rupees and fertiliser grade phosphoric acid has been cut to from 12 to 5 percent, Goyal said.

Earlier, in the press conference the minister had said that the rates were rationalised on 100 items.

George Osborne announced as far back as 2016 that the government would seek to abolish the "tampon tax" but Britain now remains tied to European Union rules. Considering the senior citizens, Piyush Goyal also said that the supply of services by an old age home has also been exempted from GST. Foreign manufacturers, however, would not be subject to input taxes and will also not have to pay any GST, putting them at a massive advantage.

Presently, registered persons with aggregate turnover up to Rs. 1.50 Crores are eligible to file quarterly returns under the new tax regime. As Neo Pachisia, a Shamanic healer, eloquently said on Twitter, "You do something stupid, rectify it and want to take credit for rectifying it?" The ones who use costly branded napkins (and who'll benefit the most from this tax exemption) are anyway less likely to stop using these only because their period-expenditure increased by 8-10 rupees.

In a big relief to hotels, 28 per cent GST won't apply if the actual money collected is less than Rs 7,500 regardless of the published tariff.

Chartered Accountant Nitesh Jain summarised Saturday's announcements by the Council as efforts to simplify the system, remove as many items from the tax slab of 28 per cent and ease compliance.

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It was meant to unify the over US$2 trillion economy into a single market, with four tax rates of 5, 12, 18 and 28 per cent.

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 GST Council will next hold a meeting on August 4, exclusively catering to the needs of the Micro, Small and Medium Enterprise (MSME) sector.

Taxpayers who are yet to register under the GST have been given a final extension till August 31.

"Today's decisions of the GST Council were guided by simplification, rationalisation..." EY Partner Abhishek Jain said: "Reduction in ethanol GST rate for use by oil companies is welcome as major petroleum products are outside GST, and this should help reduce their cost". In its meeting in November a year ago, the Council had reduced rates in over 178 items in the 28 per cent tax bracket.

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