The Government has clarified that necessary items part of baby bags will be levied 18% GST. This comes after a few manufacturers had sought to pass wet baby wipes under a different GST code as non-woven textile material. This brought the GST rate down to 12% on these essential items. They might now have to compensate for the foul play and pay the remaining tax amount.
To evade GST Tax, some manufacturers saved tax on wet baby wipes by categorizing them under different GST category. This reduced the tax by 6%. In addition to the tax amount, the revenue department may also impose penalties. Reportedly, the Uttarakhand Authority of Advance Ruling has already clarified any pertaining tax disputes between the authorities and manufacturers by subjecting baby wipes to 18% GST. Some other important key points from the ruling include:
- Fortified Toned Milk, as well as fresh and pasteurized milk, will attract zero GST.
- Tamarind kernel powder of all types modified or plain will attract 5% GST.
Since its very introduction, GST has had a cordial relationship with rate-related ambiguities. The flaw is in the perception of law rather than the execution by Government Bodies. Hence the recent verdict by AAR must clear all lingering doubts that have been used as a deceptive tool by some manufacturers in industries like automotive, fertilizers etc. Rate uniformity remains a major objective for AAR at this point in time.
Read Also: Revised GST Slab Rates Finalized by the GST Council
