28th GST Council Meeting Updates

Yarab A | Published Date: July 24, 2018 | Updated on: December 14, 2020

On 21^st 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
Toran

Reduction in GST Rates to 0%

This was probably the most lauded section of the 28th GST Council changes. At the 28^th 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

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 28^th GST Council meeting, that the refund will henceforth be allowed – and the same will be applicable on all purchases post the notification is issued.

Footwear

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.

Other Clarifications

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 28^th 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.