New Delhi, May 19: The Goods and Services Tax (GST) rates for 1,211 items has been rolled out on Thursday. With India’s landmark tax reform is all set for its rollout on July 1, the rates announced are along the expected lines, where a majority kept at 18 percent. The GST Council, the apex decision-making body for the new tax on Thursday decided not to impose the tax on commodities of everyday use. Headed by Union Finance Minister Arun Jaitley and comprising state representatives, the GST rates for 1205 items out of 1211 were finalised at the first day of the two-day meeting in Srinagar of the GST Council. Though the rates of gold and beedi remained undecided, rates of commonly used products and foodgrains will become cheaper while milk will be exempted from the Goods and Services Tax.
The new GST rate structure is extremely positive and it has taken into consideration the requirements of the common man. The essential products of daily use like foodgrains, hair oil, soaps and toothpaste as also electricity will cost less from July 1 when the GST is scheduled to be rolled out. The GST rates that have been rolled out on Thursday will help drive consumption as well as long-term economic growth. Under the new goods and services tax, the Council fitted all but six items in 5, 12, 18 or 28 percent tax brackets. Dairy products will not be taxed, mobile phones will be taxed at 12%, cigarettes and cars at the highest tax rate of 28% plus cess. GST rates for certain goods like textile, footwear, biris, precious metals, etc. are yet to be decided by the GST Council.
Here are goods & services that will become cheaper after GST roll out:
Under Nil slab (No tax slab)
There will be no tax on essential and daily usage commodities like meat, fresh vegetables, natural honey, jaggery, prasadam, kumkum, bindi, pappad and contraceptives. Also, Sindoor, stamps, judicial papers, printed books, newspapers, bangles, handloom etc have been exempt from GST levy. The products which are used on a daily basis such as foodgrains, hair oil, soaps and toothpaste as also electricity will cost less from July 1 when the GST is scheduled to be rolled out. Currently, some states levy Value Added Tax (VAT) on them.
Under 5% slab
Daily-use items like sugar, tea, coffee (barring instant coffee) and edible oil, pizza bread, sevaiya, condensed milk, frozen vegetables will attract 5 percent levy. The 5% slab will also attract ‘Mithai’ or sweets (like gulab jamun. Rasgulla etc.). Jaitley said that cereals will be in the exempt list but what is to be done with packaged and branded food has to be separately decided.
Under the 12% slab:
Frozen meat products , butter, cheese, ghee, dry fruits in packaged form, animal fat, sausage, fruit juices, Bhutia, namkeen, Ayurvedic medicines, tooth powder, agarbatti, colouring books, picture books, umbrella, sewing machine, and cell phones will be under 12 per cent tax slab. The Revenue Secretary informed that out of the 1211 items, 7 per cent will be exempted, 14 percent will be in the 5 per cent slab, 17 per cent in the 12 percent bracket, 43 percent in the 18 percent segment, while 19 percent will go into the top bracket of 28 per cent.