NEW DELHI: In a bid to woo the middle class ahead of the general elections, the government on Saturday slashed GST rates on over 100 products and services and simplified return filing process for businesses. 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. After a nine-hour meeting of the GST Council, chaired by acting finance minister Piyush Goyal, the government on Saturday decided to exempt GST on sanitary napkins; deities made of stone, marble or wood; Raakhis without precious metals; raw materials used in brooms; commemorative coins; fortified milk; and the premium paid under the Ayushman Bharat Scheme.
The government also reduced rates on an array of daily-use appliances and products, including small TV, washing machine, refrigerator, paint, perfume, footwear up to `1,000, and handicraft items.
In a big relief to hotels, 28 per cent GST won’t apply if the actual money collected is less than Rs 7,500 regardless of the published tariff. The new rates will kick off from July 26. “The reduction (of GST rates) will have nominal impact on the revenue,” acting finance minister Piyush Goyal told media after the meeting here on Saturday, adding that 100 items will be impacted by this change.
While Goyal did not specify the quantum of revenue loss, Assam finance minister Himanta Biswa Sarma said the impact of rate cut on white goods alone would be `6,000 crore. “As per the initial estimation, the quantum of revenue loss will be `14,000-15,000 crore. However, the actual impact may vary,” a senior finance ministry official told TNIE.
The Council also decided that taxpayers with turnover up to `5 crore will continue to pay monthly tax, but file returns only once a quarter. This could benefit 93 per cent of tax payers. Those yet to register under GST will be given extension till August 31 without late penalty. Further, the Council recommended raising the upper turnover limit for opting composition scheme to `1.5 crore from `1 crore at present. The Council will meet next on August 4.