GST rate cut on sanitary pads, handlooms likely
The GST Council is likely to reduce the tax rate on sanitary napkins from the current 12 per cent to 5 per cent at its meeting on Saturday. The Council, chaired by Finance Minister Piyush Goyal, will also take up lowering of rates on items like handicrafts, handlooms, and e-books, which have lower revenue implications. The Council will have a full-fledged meeting after over three months. DILASHA SETH reports
The Goods and Services Tax Council is likely to reduce the rates on a handful of products at its next meeting this Saturday. That on sanitary napkins is likley to be cut from the present 12 per cent to five per cent. Lower rates are also possible on handicrafts, handlooms and ebooks, among others.
“The rationalisation of rates will be taken up for smaller items that do not have major revenue implications but are commonly consumed. However, we would not be touching the items in the highest slab,” said a government official. It is unclear if the issue of levying a cess on sugar will be on the agenda but the GST on ethanol is likely to be reduced to 12 per cent from the current 18 per cent.
A panel headed by Assam finance minister Himanta Biswa Sarma has not favoured the sugar cess, proposed by the Centre to ease payments from mills to sugarcane farmers.
An alternative could be to instead impose a cess of one per cent on luxury goods.
The Council will be having a full-fledged meeting after a little over three months.
Sanitary napkins, handlooms and handicrafts are currently taxed at 12 per cent; ebooks attract 18 per cent.
Women’s groups have campaigned for less GST on sanitary napkins. Also last year, the high court here had asked the government why this product had not been exempt from GST when items such as bindis, sindoor and kajal were.
“The proposal before the Council will be to reduce the rate to five per cent for sanitary napkins; reducing it to nil will deprive domestic manufacturers from input tax credit. That will put them at a disadvantage as against import,” said a government in for but on all the states. “The a handlooms the definition past official. Council discussion few meetings Rate could was acceptable reduction discussed is not centering as agree well to or products around should whether made apply out to the the of reduction handlooms. cloth that contain It could at least be 50 products per cent handloom,” said an official. As for handicrafts, it could be items priced up to a certain limit that might see a rate cut, such as ~500 or ~1,000. The Council might also take up rate reduction 18 on e-books, taxed at per cent as against a nil rate for normal books. “Normal books are exempt. An e-book is nothing but a book; only the mode of delivery is online. Hence, there should not be any distinction. In no other GST regime anywhere in the world has there been a distinction between normal books and e-books,” said Pratik Jain, partner at consultancy PwC India. The Council will also take forward the issue of return simplification, approved by it at the earlier meeting. “It is essential to simplify returns and provide staggered timelines for return filing,” said M S Mani, partner at consultants Deloitte India.