The government reduced the GST rates and gave a big gift of the festive season to the common people.
The 56th meeting of the GST Council held in New Delhi on September 3 under the chairmanship of Finance Minister Nirmala Sitharaman has paved the way for a widespread change in India’s indirect tax structure. These changes, which come into force from the first day of Navratri on 22 September, will directly affect the domestic budget. Many items of dollary use will become cheaper, including milk, bhujia, shampoo, tooth paste, pulses, shoes etc. At the same time, tax rates will be seen more on some categories. Let us also tell you what kind of gift the government has given to the common people on the first day of Sharadiya Navratri. This means what kind of gift has been given by the government on the festive season.
What will be cheaper?
Food and daily use items
- Milk Products: UHT milk will now be tax free (less than 5 per cent), while the tax on thick milk, butter, ghee, cheese and cheese has come down from 12 per cent to 5 per cent or in some cases.
- Staple Food Products: Malt, starch, pasta, cornflakes, biscuits, and even chocolate and cocoa products will be reduced from 12-18 percent to 5 percent.
- Dry Fruits and Nuts: Almonds, pistachios, hazelnuts, cashews and dates, which were earlier taxed at 12 per cent, will now have only 5 per cent tax.
- Chinese and sweets: Sweets like refined sugar, sugar syrup and toffee and candy have come into 5 percent tax slab.
- Other Packaged Food Products: Vegetable oil, animal fats, food spreads, sausages, meat substances, fish products and malt extract-based packaged food products have been kept in a 5 % category.
- Food products (except for roasted gram), already packed and label, will be kept under tax, 18 percent to 5 percent tax.
Water, which include natural or artificial minerals water and rayred water, which have not been added excess sugar or other sweet substances or tastes, 18 percent to 5 percent will be kept under tax.
Agri and Fertilizer
- Fertilizer (reduced from 12 per cent/18 per cent to 5 per cent).
- The tax rate on selected crop nutrients including seeds and crop nutrients has been reduced from 12 per cent to 5 per cent.
- Health Service and Education
- Tax rates have been cut on life saving drugs, health related products and some medical devices. Those have been reduced to 5 percent or zero than 12 percent /18 percent.
- GST has been reduced from 5 % -12 per cent to zero or 5 per cent on items like education services and books and teaching accessories.
Consumer products
- Electronics: GST will decrease from 28 per cent to 18 per cent on selected devices such as early levels and common people used items.
- Shoes and textiles: GST will decrease from 12 per cent to 5 per cent, which will reduce the cost of massively sold products.
- Paper: GST on some grade will be reduced from 12 percent to zero.
- GST on hair oil, shampoo, dental floss, toothpaste will be reduced from 18 percent to 5 percent.
Auto sector
- GST on small cars will be reduced from 28 percent to 18 percent.
- The GST on motorcycles with a capacity of 350 cc and below will be reduced from 28 percent to 18 percent.
- GST 40 percent on big cars and motorcycles, no additional cess.
- GST on all cars will be 18 percent.
- GST on electric vehicles will remain at 5 percent.
What will be cheaper in other sectors
- Renewable Energy Components: Reduced from 12 % to 5 %.
- Construction material: Major raw materials reduced from 12 percent to 5 percent.
- Sports goods and toys: reduced from 12 per cent to 5 per cent.
- Leather, wood and handicrafts: 5 % tax was brought under tax.
In short, ranging from grocery accessories and fertilizers to shoes, textiles and even renewable energy, a fairly large range of goods and services is going to be more economical, which will provide relief to the common family, small businesses and ambitious middle classes.
What is going to be expensive?
Sin products
The existing high GST rates and compensation compassation cess on pan masala, gutkha, cigarette, chewing tobacco, jarda, un-manufactured tobacco and bidi will remain in force until the outstanding loan-related loans are paid.
Additionally, the valuation of these products will now be transferred to the retail price (RSP) instead of the transaction value. Which will tighten the compulsion.
All types of water, including additional sugar or other sweet substances or tastes, will be increased from 28 per cent to 40 per cent.
Luxury and premium products
A new rate of 40 percent will be applicable for sin and luxury items, which will not provide tax exemption on items like cigarette, premium liquor and expensive cars.
Imported Armard luxury sedan will be exempted only in special cases, which will be imported by the President’s Secretariat.
Energy and fuel
On coal, which was earlier taxed 5 percent, now 18 percent tax will be levied, which will increase the cost of coal based industries.
Service
Restaurants operating in “Specified Primes” can no longer declare themselves eligible for 18 percent tax with ITC option, which will remove a possible flaw.
Some lottery and intruditory services will have to face redifial valuation rules, so that their tax will remain or will remain more than.