The Goods and Services Tax (GST) Council on 18 May 2017 fixed the GST rates for specific products which may lead to lower prices for a majority of products of mass consumption.
Moreover, the GST Council also fixed the deadline for rolling out the GST on 1 July 2017 to create a single national market.
GST Rates of 1211 items were finalised by the GST council with 81 per cent of them facing a levy of up to 18 per cent. However, GST Council has still to decide on the GST levy on gold, biscuits, packaged and branded cereals, footwear, bidis and textiles.
• Foodgrains, cereals and milk will cost less from 1 July as the GST Council decided to exempt these daily-use commodities from the GST levy.
• Common use products like hair oil, soaps and toothpaste will be charged with GST of 18 per cent instead of present 22-24 per cent tax incidence.
• Milk and curd will be exempted from taxation when the Goods and Service Tax.
• 'Mithai' or sweets will attract 5 per cent GST levy.
• Daily-use items like sugar, tea, coffee (barring instant coffee and instant tea) and edible oil will attract the lowest tax rate of 5 per cent, almost the same as current incidence. Instant tea and coffee are expected to be in a separate bracket.
• Automobiles will attract 28 per cent GST, with luxury vehicles facing an additional cess of 15 per cent.
• Small petrol cars will face 1per cent GST, while diesel-powered small cars will attract 3 per cent GST.
• In addition, bikes with engine capacity of over 350cc, which are seen as luxury goods, will see a new cess of 3 per cent.
• For coal, there will be reduction of tax from 11.69 per cent to 5 per cent, helping lower the cost of power.
• Similarly, the burden on those buying refrigerators or washing machines will come down from around 31-32 per cent to 28 per cent.
GST Rates of Various Commodities
• Jaggery is exempt under GST.
• Cane sugar, beet sugar Bio gas plant, wind mills, kerosene lantern and coal are in the 5 per cent GST slab.
• Mobile phones, fountain pen ink, tooth powder, incense sticks, feeding bottles, Braille paper, children’s colouring books, umbrellas, pencil sharpeners, tractors, bicycles, contact lenses, spectacle lenses, utensils, sports goods, fishing rods, combs, pencils and hand paintings are placed under the 12 per cent tax rate under GST.
• Goods under 18 per cent tax rate include helmets, LPG stoves, nuclear reactors, clocks, military weapons, electronic toys and plastic buttons.
b The items in the highest tax slab of 28 per cent include aerated drinks, perfumes, after-shave lotions, deodarants, clothing of furskin, razor blades, cars, revolvers and pistols.
Of all 1211 items, 7 per cent of the items fall under the exempt list, while 14 per cent fall in the lowest tax bracket of 5 per cent. Another 17 per cent items are in 12 per cent tax bracket, 43 per cent in 18 per cent tax slab and 19 per cent of goods fall in the top tax bracket of 28 per cent.
The only concern is that 19 per cent GST items which are over 200 would be kept under 28 per cent, which was initially meant for only few commodities such as luxury cars, aerated beverages etc.
GST regime is expected to unify the whole of the country by subsuming Central and State levies such as excise duty, additional duties of customs, service tax, value added tax, central sales tax, entry tax, octroi and luxury tax.