28th GST Council Meeting Updates – Rate Changes for Goods
On 21st July, 2018, the 28th GST Council meeting was conducted to take major decisions pertaining to the existing GST model. A plethora of changes took place, with respect to rate changes in goods, rate changes in services, and most importantly, the simplified GST return filing model, which has been under speculation for a long time.
In this blog, we will take you through the major updates from 28th GST Council meeting, with regards to the GST rate changes of specific goods.
Reduction in GST Rates – 28th GST Council Meeting
The 28th GST Council meeting saw a plethora of reductions in the GST rate, which are listed as follows:
Reduction in GST Rates from 28% to 18%
As per the 28th GST Council recommendations, the rate of the following goods were reduced from 28% to 18%:
- Paints and varnishes, including enamels and lacquers
- Glazier’s putty, grafting putty, resin cements
- Refrigerators, freezers and other refrigerating or freezing equipment including water cooler, milk coolers, refrigerating equipment for leather industry, ice cream freezer etc.
- Washing machines
- Lithium ion batteries
- Vacuum cleaners
- Domestic electrical appliances – food grinders and mixers, food or vegetable juice extractors, shavers, hair clippers etc.
- Storage water heaters and immersion heaters, hair dryers, hand dryers, electric smoothing irons etc.
- Televisions up to the size of 68 cm
- Special purpose motor vehicles – crane lorries, fire fighting vehicle, concrete mixer lorries, spraying lorries
- Works trucks which are self-propelled, not fitted with lifting or handling equipment which are used in factories, warehouses, dock areas or airports for short transport of goods
- Trailers and semi-trailers
- Miscellaneous articles such as scent sprays and similar toilet sprays, powder puffs and pads for the application of cosmetics or toilet preparations
Reduction in GST Rates from 28% to 12%
As per the 28th GST Council updates, the GST rate for fuel cell vehicles was reduced from 28% to 12%. In addition, the 28th GST Council also decided to remove the previously applicable compensation cess on fuel cell vehicles.
Reduction in GST Rates from 18% to 12%
As per the 28th GST Council meeting updates, the GST rates of the following goods was decided to be reduced from 18% to 12%:
- Bamboo flooring
- Brass kerosene pressure stove
- Hand operated rubber roller
- Zip and slide fasteners
- Handbags including pouches and purses, jewellery box
- Wooden frames for painting, photographs, mirrors etc.
- Art ware of cork, including articles of sholapith
- Stone art ware, stone inlay work
- Ornamental framed mirrors
- Glass statues, other than those of crystal
- Glass art ware including pots, jars, votive, cask, cake cover, tulip bottle, vase
- Art ware of iron
- Art ware of brass, copper / copper alloys, electro plated with nickel / silver
- Aluminium art ware
- Handcrafted lamps including panchloga lamp
- Worked vegetable or mineral carving, articles thereof, articles of wax, of stearin, of natural gums or natural resins or of modelling pastes, including articles of lac, shellac
- Ganjifa card
Reduction in GST Rates from 18% to 5%
As per the 28th GST Council meeting highlights, the GST rates of the following goods were reduced from 18% to 5%:
- Ethanol for sale to oil marketing companies for blending with fuel
- Solid bio fuel pellets
Reduction in GST Rates from 12% to 5%
As per the 28th GST Council meeting news, the GST rates of the following goods was reduced from 12% to 5%:
- Chenille fabrics and other fabrics
- Handloom dari
- Phosphoric acid – fertilizer grade only
- Knitted cap / topi having retail sale value not exceeding INR 1000
- Handmade carpets and other handmade textile floor coverings, including namda / gabba
- Handmade lace
- Hand woven tapestries
- Hand-made braids and ornamental trimming in the piece
Reduction in GST Rates to 0%
This was probably the most lauded section of the 28th GST Council changes. At the 28th GST Council meeting, the GST rate for the following goods were culled down to 0%:
- Stone / Marble / Wood Deities
- Rakhi (other than that of precious or semi-precious material)
- Sanitary Napkins
- Coir pith compost
- Sal Leaves, siali leaves and their products
- Sabai Rope
- Phool Bhari Jhadoo which is a raw material for brooms
- Khali dona
- Circulation and commemorative coins, sold by Security Printing and Minting Corporation of India Ltd to the Ministry of Finance
Clarifications in GST Rates – For specific goods
Apart from GST rate reductions, certain clarifications with regards to GST rates of certain goods also formed part of the 28th GST Council highlights.
Fabrics attract GST at the rate of 5%, but it was subject to the condition, that refund of accumulated ITC because of inverted duty structure will not be allowed. However, considering the difficulties faced by the fabric sector, it was decided in the 28th GST Council meeting, that the refund will henceforth be allowed – and the same will be applicable on all purchases post the notification is issued.
A GST rate of 5%, which was earlier applicable to footwear priced up to INR 500, will now be extended to footwear priced up to INR 1000. Footwear having a retail sale price of more than INR 1000, will continue to attract 18% GST.
- Milk enriched with vitamins or minerals salt (fortified milk) will be exempt from GST
- Water supplied for public purposes (other than in sealed containers) will be exempt from GST
- 5% GST will be charged on Pool Issue Price (PIP) of Urea imported on government accounts for direct agriculture use, instead of assessable value plus custom duty
- 5% GST will be charged on both treated (modified) tamarind kernel powder and plain (unmodified) tamarind kernel powder
- 5% GST will be charged on beet and cane sugar, including refined beet and cane sugar
- 5% GST will be charged on marine engines
- 5% GST will be charged on unpolished kota stone and similar stones (other than marble and granite)
- 18% GST will be charged on ready to use polished kota stone and similar stones (other than marble and granite)
- Coal rejects from washery, arising out of cess paid coal on which ITC has not been taken, will be exempt from GST compensation cess
Post these changes, the most important 28th GST Council news doing the rounds is, that only 35 goods now remain in the highest tax bracket i.e. 28% – a huge relief for household consumers. The 28th meeting of the GST Council has indeed paved the way for a more simplified GST tax bracket, and one can hope that it will continue to get even more simplified in the days to come.
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Author: Pramit Pratim GhoshPramit, who has been with Tally since May 2012, is an integral part of the digital content team. As a member of Tally’s GST centre of excellence, he has written blogs on GST law, impact and opinions - for customer, tax practitioner and student audiences, as well as on generic themes such as - automation, accounting, inventory, business efficiency - for business owners.
Pramit Pratim Ghosh
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