Govt relents after year-long protests... exempts sanitary napkins from GST

New Delhi: Conceding a year-long demand, sanitary pads were on Saturday exempted from GST as the GST Council reduced tax rates on an array of daily use appliances and products. While GST tax on sanitary pads was cut from 12 per cent to zero, rakhis were exempted from the tax, Finance Minister Piyush Goyal told reporters here.

"Sanitary napkins exempted from GST," Goyal said. Among 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.

"GST Council cuts tax rate on an array of products. Rakhis have been exempted from GST, tax on ethanol has been cut to 5 per cent, small handicrafts have been exempted," Goyal said. Besides, tax rates on worked up Kota stone, sand stone and similar quality of local stones were cut from 18 to 12 per cent, with the purpose of avoiding classification disputes.

The value limit of footwear was enhanced from Rs 500 to Rs 1,000 for 5 per cent rate. GST on 17 items used by middle class viz paints, refrigerators, washing machines, vacuum cleaners, storage water heaters, TVs up to 68 cm was reduced from 28 to 18 per cent. The next GST Council meeting will be held on August 4.

Industry has been demanding that an independent judicial member should preside over the functioning of the national GST appellate tribunal to be set up for adjudicating disputes between revenue and taxpayers. Under the GST (Goods and Services Tax) law, an aggrieved party can file an appeal against the order of the AAR within a period of 30 days, which may be further extended by a month.

As per the law, all states are required to set up at least one AAR for seeking advance ruling over GST levy and one appellate authority to hear appeals against the AAR order. In March, the New Delhi bench of the AAR had held that duty-free shops at airports are liable to deduct GST from passengers. However, these shops were exempt from service tax, and Central Sales Tax in the earlier regime.

Further, the solar industry too was left in a vexed situation when the Maharashtra AAR said that 18 per cent GST rate would be levied for installation works, but the Karnataka-bench of AAR passed an order levying 5 per cent GST on the same.