New Delhi, June 30: With less than a day for its rollout, the biggest tax reform Goods and Services Tax(GST) in Post-independence India, people are anxious about life under the new tax regime. While people are expecting a less expensive life, traders are baffled over the procedures to be followed in making GST successful. Also Read - CAIT Announces Nationwide Movement Against New Amendments in GST and E-Commerce
However, an analysis of tax rates suggests a neutral or slightly positive impact on the prices of goods. Analysts are of the opinion Fast Moving Consumers Goods (FMCG) Sector is likely to benefit as the Goods and Services Tax Council led by Finance Minister put most of the edible items along with daily use products under the tax slab of 18 percent. Also Read - Bharat Bandh Today Against GST, Petrol Price Hike, E-way Bill: What to Remain Shut, What’s Not | All You Need to Know
Tax exemption on raw material like cereals and jaggery may turn final goods cheaper but Detergents, Baby foods, Sanitary Napkins may cost you more after the council put the items in tax slab of 18 percent. The council was criticised for putting a higher premium on essential items like baby foods and sanitary napkins. Currently, Baby food products attract a rate of 5 to 12 percent tax, 18 percent tax under GST will certainly perturb parents of infants. Also Read - Bharat Bandh on 26 February 2021: Over 8 Crore Traders to Protest Against GST, Fuel Price Hike and E-Way Bill
Similarly, Sanitary Napkins are charged at 10-12 percent, the higher tax of 18 percent will make things worse for women. Even, some women groups demanded an exemption to make it available for all. But Industry leaders believe Consumers will shift to branded goods after the tax will ensure unorganised sector, manufacturers of most daily products, will under the web o the new tax.
But lower prices on hair dye, paints, ayurvedic medicines and skin care products may cheer the consumers. Toothpaste, Tea and Soaps too will cost consumers less. But the rollout will only be successful if the government ensure two things. One, the companies transfer the benefits to consumers. Second, the transition from present tax regime to GST is seamless and smooth.
Several companies complained the traders lowered the demand of goods ahead of July 1 in anxiety over consumption. Even, several traders organisation called for a strike on Friday opposing the move.Finance Minister Arun Jaitley on Friday expected the anti-profiteering clause of the GST will not be used time and again but the multinational corporations, notorious for flouting laws appears to be a headache for the government.