GST or the goods and services tax became reality on June 30th. India changed its tax reform after over 150 years and the confusion among manufacturers, distributors and retailers was obvious and very well visible. GST does not differentiates between a service and a good; thousands of these products as well as services were accommodated under different GST tax slabs.
The Central Board of Excise and Customs (CBEC) has rolled out a list of the common use items which will become cheaper post GST.
Item | Pre-GST incidence | GST rate |
Wheat | 2.50% | 0% |
Rice | 2.75% | 0% |
Unbranded flour | 3.50% | 0% |
Curd/Lassi/Butter Bilk | 4% | 0% |
Unbranded natural honey | 6% | 0% |
Children's picture, drawing or colouring books | 7% | 0% |
Ultra high temperature (UHT) milk | 6% | 5% |
Tea (other than unprocessed green leaves of tea) | 6% | 5% |
Milk powder | 6% | 5% |
Sugar | 6% | 5% |
Sweetmeats | 7% | 5% |
Vegetable edible oils | 6% | 5% |
Spices | 6% | 5% |
Footwear up to Rs. 500 | 10% | 5% |
Kerosene pressure lantern | 8% | 5% |
Coal | 9% | 5% |
Ketchup and sauces | 12% | 12% |
Toppings, spreads (other than mayonaise, salad dressings, mixed condiments and mixed seasonings) | 12% | 12% |
Mineral water | 27% | 18% |
Sugar confectionery | 21% | 18% |
Toothpowder | 17% | 12% |
LED | 15% | 12% |
X-Ray films for medical use | 23% | 12% |
Diagnostic kits and reagents | 16% | 12% |
Fixed speed diesel engines of power not exceeding 15HP | 16% | 12% |
Fly ash bricks and fly ash blocks | 16% | 12% |
Sewing machine | 16% | 12% |
Hair oil | 27% | 18% |
Toothpaste | 27% | 18% |
Soap | 27% | 18% |
Other footwear | 21% | 18% |
LPG stove | 21% | 18% |
Aluminium foils | 19% | 18% |
School bag | 22% | 18% |
Printers (other than multifunction printers) | 19% | 18% |
Staplers | 27% | 18% |
Tractor rear tyres and tubes | 20% | 18% |
Helmet | 20% | 18% |
CCTV | 19% | 18% |
Baby carriages | 27% | 18% |
Plastic tarpaulin | 19% | 18% |
Bamboo furniture | 23% | 18% |
Headgear and parts thereof | 27% | 18% |
Cement | 29% | 28% |
As you can see, items like wheat, rice, unbranded flour, cur/lassi/butter/milk, unbranded honey and children’s picture/drawing/coloring books have got a major deduction on the tax implied on them before GST. Items which are a necessity for the common man are attracting a tax percentage of 0%.
Other than the list provided by CBEC, here is a list of items which are expected to get cheaper:-
- Prices of movie tickets
- Dining in restaurants
- Two wheelers
- Entry Level Sedan’s
- SUV’s and luxury or premium cars
- Televisions
- Washing Machines
- Gas Stoves
GST is said is to increase the GDP (Gross Domestic Product) of India by 2% in just one year; and with the reduced tax rates, the common man is bound to be happy by Modi’s Sarkar. GST will also make India a business friendly country and thereby increase the total FDI (Foreign Direct Investments) in our country.
GST is considered to be a historical tax reform in India, but like everything, it has it’s pros and cons. We will be discussing them in the coming articles, stay tuned.
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