GST exempts various commodities like pulses and rice,hair and soaps will get cheaper
NEW DELHI,May19: The Goods and Services Tax or GST will bring good news for crores in the country. In a crucial meeting, the GST council in Srinagar today finalised the rates at which various commodities will be taxed once the one tax for all kicks in from July 1. Staples like pulses and rice will get cheaper. Both of these along with foodgrain have been added to the exempt list, which means there will be no GST on these commodities. Till now both the staples invited taxes in different states between 1 and 5 per cent. Milk has been added to the exempted category though in states like UP it was not taxed.
Consumer durables will also get a price cut after the implementation of GST. Due to multiplicity of taxes, items like air conditioners used to invite 32 per cent or more tax. Now they have been put in 28 per cent slab which means the sector which has been battling dipping sales figures can expect a shot in the arm.
But for those aspiring to buy cars, there may not be much to cheer. Cars will not get cheaper due to GST. Cars will attract three categories of cesses 1, 3 and 15 per cent. High-end motorcycles will attract 3 per cent cess with 28 per cent GST rate. The GST council on Day 1 of the meet ruled that 55 items will invite cess.
The GST Council still has a lot of work to do as rates of items like biscuits, footwear, gold, textiles, handloom handicraft, power-driven agricultural equipment are yet to be decided.
The GST Council discussed the tax rates for thousands of commodities which have to be grouped in seven categories of taxes – 0 per cent, 5 per cent, 12 per cent, 18 per cent, 28 per cent, special category and luxury items category.
Currently 299 items are on the exempt list from taxes at the central level and 99 in states. While the states demanded that several items of daily use in their region should be add to the free-from-taxes category the centre wanted to keep the list restricted to 100-odd items.
After hours of deliberation today, Revenue Secretary Hasmukh Adhia announced toothpaste, soaps, hair oil will get cheaper post GST.
With the cascading impact of multiple central and state level will be gone due to GST, several other daily use items like toothpaste, hair oil, and soap will attract 18 per cent GST against 28 per cent tax currently.
Even cereals prices will witness a climb down as they have joined the exempt category compared to the 5 per cent tax rate levied on them. Sugar, tea, coffee will meanwhile attract 5 per cent tax rate.
Addressing a press conference, Finance Minister Arun Jaitley said, “GST is an efficient system of taxation and this inherent efficiency will help curbing tax evasion.”