Goods and Services Tax (GST) council has cut down the tax rates on consumer items. On Saturday, the GST council came up with a new rate-cut list of over 50 items including small TVs, refrigerators, and washing machines, which are currently taxed at 28 percent. These items will now be considered under the 18 percent tax section and the news of 10 percent relaxation on the tax has relieved common people.
Along with the rate-cutting, the GST council also exempted tax on Sanitary napkins and Rakhis. These changes in the tax rates will be implemented from July 27 onwards all over the country. After the 28th meeting of GST council, Finance minister Piyush Goyal announced the news of reduced tax rates.
Another step taken by the government is to introduce new forms called “Sahaj” and “Sugam”, which will simplify the return filing procedures. The new policy has hanged the tax filing systems for enterprises as well. Now, all the enterprises with an annual turnover of up to INR 5 crores will have to file their returns quarterly though they will have to pay tax on a monthly basis. All these years, these enterprises had to file their returns every month.
This relaxation of 10% will be applicable on small televisions, lithium batteries, domestic electrical appliances, mixers, water heaters, vacuum cleaners, hair dryers, hair smoothening irons, and toilet sprays. Now, buying footwear will also be cheaper as footwear has been brought to 5% slab from 18%.
To promote and encourage the domestic industry, the taxation on handicrafts has been brought down to 12% from 18% and, handmade textile flooring, carpets, toran, and tapestry are under the 5% margin after the rate cuts.
When GST was implemented in 2017, there were 226 items listed under the 28% tax slab; After such big rate cuts by GST council over past one year, now there are only 35 goods that are left under this margin.
Now, staying at a hotel might get cheaper as the tax will be implied based upon the transaction value in place of declared tariffs. Hotels with tariff below INR 1000 are exempted from GST.