Published: Mon, July 23, 2018
Finance | By Gustavo Carr

‘Lahu ka lagaan’ ends: Sanitary products made tax free

‘Lahu ka lagaan’ ends: Sanitary products made tax free

Sanitary napkins will be exempt from GST, Maharashtra Finance Minister Sudhir Mungantiwar said on Saturday after a meeting of the GST Council.

Sanitary pads were taxed at 12 percent under the GST, which was launched a year ago. Considering the senior citizens, Piyush Goyal also said that the supply of services by an old age home has also been exempted from GST.

India has scrapped its 12% tax on all sanitary products following months of campaigning by activists.

Among several items on which GST was reduced include footwear, small televisions, water heater, electric ironing machines, refrigerators, lithium-ion batteries, hair dryers, vacuum cleaners, food appliances and ethanol. To compensate for the taxes incurred on raw materials used to make sanitary napkins, pad manufacturers might increase their prices.

Saturday's (Jul 21) announcement is part of a slew of changes to the national goods and services tax (GST) meant to reduce the prices of around 90 key consumer goods, many of which target urban middle classes ahead of next year's general election.

Mr Goyal said, GST rate on handbags, jewellery box, wooden box for paintings, artware of glass, stone endeavour, ornamental framed mirrors and handmade lamps were reduced to 12 per cent.

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The new national GST (goods and services tax) was introduced last July under Prime Minister Narendra Modi, and was the country's biggest tax overhaul in a generation.

So far, businesses with turnover of up to Rs 1.5 crore were permitted to file returns quarterly.

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. It is estimated to cause a revenue loss of around Rs 8,000-10,000, crore with cuts in the peak 28% slab alone costing the exchequer about Rs 6,000 crore. While the changes will offer relief to the middle-income households and small businesses, sources say the government stands to lose revenue to the tune of Rs 15,000 crore.

"I think all women will be happy to know that sanitary pads will now have 100 per cent exemption".

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

In terms of tax returns, Sisodia said quarterly returns for traders having turnover up to Rs 5 crore have been approved by the GST Council. 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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