Kolkata: Moving swiftly on Prime Minister Narendra Modi’s “double Diwali gift” promise during his Independence Day speech, Union finance minister Nirmala Sitharaman announced the GST 2.0 reforms that could help drive down the monthly budget of a large number of people in the country. Close to midnight on Wednesday, she announced a range of GST cuts that could help bring down monthly expenditure list of the average household.
The finance minister served a huge bouquet of benefits with hundreds of item moving down the tax brackets. The movement was mainly from the 12% slab to the 5% slab and from the 28% slab to the 18% slab. Only a few goods like tobacco-related items, aerated water, carbonated drinks and luxury cars have been moved up from the 28% to the small exclusive club that will attract 40% tax. Let’s see which are the items of daily use for the masses that are set to become cheaper after September 22 when the new rates kick in. Some items have been shifted from 5% to nil.
The great GST drop
GST to drop from 18% or 12% to 5%: Hair oil, toilet soap bars, shampoos, toothbrushes, toothpaste, bicycles, tableware, kitchenware and other household articles
Reduction of GST from 5% to zero: Ultra-High Temperature milk, prepackaged and labelled chena or paneer; Indian Breads such as chapati/roti/paratha/parotta
Reduction of GST from 12% or 18% to 5%: Almost all food items such as packaged namkeens, bhujia, sauces, pasta, instant noodles, chocolates, coffee, preserved meat, cornflakes, butter, ghee, etc.
Reduction of GST from 28% to 18%: AC machines, TVs~32 inch (all TVs now at 18%), dishwashing machines, small cars, motorcycles equal to or less than 350 cc engine
Reduction of GST from 12% to 5%: Agricultural goods such as tractors, agricultural, horticultural or forestry machinery for soil preparation or cultivation, harvesting or threshing machinery, including straw or fodder balers, grass or hay mowers, composting machines etc
Reduction of GST from 12% to 5%: Labour intensive goods such as handicrafts, marble and travertine blocks, granite blocks, and intermediate leather goods
Reduction of GST from 28% to 18%: Cement
Reduction of GST from 12% to zero: 33 lifesaving drugs and medicines
Reduction of GST from 5% to zero: 3 lifesaving drugs & medicines used for treatment of cancer, rare diseases and other severe chronic diseases
Reduction of GST from 12% to 5%: All other drugs and medicines
Reduction of GST from 18% to 5%: Medical apparatus and devices used for medical, surgical, dental or veterinary usage or for physical or chemical analysis
Reduction of GST from 28% to 18%: Buses, trucks, ambulances etc
Uniform rate of 18%: Auto parts irrespective of their HSN code; Three-Wheelers from 28% to 18%
Reduction of GST from 12% to 5%: Renewable energy devices and parts for their manufacture
Reduction of GST from 12% to 5%: Hotel accommodation services having value less than or equal to Rs 7,500 per unit per day or equivalent
Reduction of GST from 18% to 5%: Beauty and physical well-being services used by common man including services of gyms, salons, barbers, yoga centres, etc