Many handicraft items such as stone, marble and wooden deities, rakhis without precious stones, brooms and commemorative coins have been made fully exempt from GST, Union Finance Minister Piyush Goyal said.
Goyal said that while GST tax on sanitary pads was cut from 12% to zero, rakhis were exempted from the tax.
A special meeting of GST council will be held on 4 August in Delhi that will be focussed on MSMEs (Micro, Small and Medium Enterprises ) sector.
The GST charged for commodities such as lithium-ion batteries, vacuum cleaners, food grinders, mixers, storage water heaters, head dryers, hand dryers, paint, varnishes, water cooler, milk cooler, ice cream coolers, perfumes, toilet sprays and other toiletries has been slashed from 28 per cent to 18 per cent.
Goyal asserted on the importance of reducing the tax on ethanol, as not only is it used for blending with petrol and diesel, it is also vital for the sugar industry, and will thus be very beneficial for the sugarcane farmers.
"There seems to be no intention of introducing cess and digi-linked incentives (if any) on the tax rates, so as to encourage ease of reporting among taxpayers and to continue with a simple GST rate structure", Gupta added.
The decisions taken on Saturday were aimed at simplification, rationalisation and relief for small business, Goyal said.
Taxes on handbags, jewellery boxes, wooden photo frames, stone art wear, ornamental frame mirrors, glass art ware, aluminum art ware and handmade carpets have been cut to 5 percent from 12 percent.
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Sanitary pads were placed in the 12% tax slab when the Goods and Services Tax was implemented on July 1, 2017, though several other products such as sindoor (vermilion) and bangles were declared tax-free.
So far, businesses with turnover of up to Rs 1.5 crore were permitted to file returns quarterly.
They are now taxed at 28 per cent. Mr Goyal said, return forms will be simplified into two formats - Sugaam and Sahaj.
"The broad level reductions in rates could lead to lower tax collections", said M S Mani, partner at consulting firm Deloitte India.
The controversial reverse charge mechanism (RCM) has also been deferred until September 2019.
To boost jobs in the economy, the GST Council also recommended for allowing refund to fabrics on account of inverted duty structure.
The most-awaited decision is on the single tax return filing system.