'Taxes on all household items cut from 28% to 18-12%,' says Jaitley as new GST rates kick in today

New Goods and Services Tax rates came into effect on Friday. The new rates were announced last week. One of the welcome moves was a GST rate cut on sanitary napkins among other items of necessity. According to reports, as many as 88 items enjoy GST rates cut including footwear, refrigerators, washing machines, among others.

Union Minister Arun Jaitley in a Facebook post stated that only luxury goods will attract the highest slab of 28 per cent.

"Today, the 28 per cent category is being phased out. A bulk of these items remaining in this category are only luxury items or sin goods. The other items outside the luxury, sin goods category are cement, air-conditioners, large screen televisions and a handful of others," Jaitley said.

"Hopefully, with further expansion of revenues, these few items may also witness a change of category. Thus within a record period of thirteen months, the GST Council has almost phased out the 28 per cent category. It is only a matter of time that the final obituary of the 'Congress Legacy Tax' is written. Only the luxury-sin tax would remain," the minister noted.

The tax reduction has reduced the cost to the consumers, increased his purchasing capacity and added to the increased consumption in the economy, Jaitley stated.

He said taxes on all household items stand reduced from 28 per cent to 18 per cent and 12 per cent. The past one year has seen rate reduction in 384 commodities, he added.

The GST Council in its meeting last week had decided to reduce taxes on 88 items, like sanitary napkins, fridge, small screen TV, washing machine, footwear, among others. The new tax rates became effective from today.

As of today, only 35 goods, including cement, automobile parts, tyres, automobile equipment, motor vehicles, yachts, aircraft, aerated drinks, betting and demerit items like tobacco, cigarette and pan masala, attract highest GST rate of 28 per cent.

As per the revised rates, items like paints and varnishes, refrigerators, freezers, water coolers, washing machines, domestic electrical appliances, TV sets up to 68cm will get cheaper as the GST rate on the same has been cut from 28% to 18%.

Sanitary pads now enjoy zero GST while footwear with a maximum retail value of Rs. 1,000 pair attract 5% GST, rest will be sold with 18% GST.

Special handicraft items may bear 12% GST rate reduced from previously levied 18%.

Goods and Services Tax (GST), which subsumed 17 local taxes, was rolled out on July 1, 2017.

(With inputs from PTI)