After the conclusion of the 2 days meet of the Goods and Services Tax (GST) Council at Srinagar, finally a clear outline has come up in terms of the rates at which more than 1,200 goods will be taxed under the regime of GST which will on effect from July 1, 2017. The rates of taxes under GST, which has been planked as the biggest tax reform since independence by the ruling party, have been a matter of intense speculation. Under the GST regime, the Council has decide 4 tax slabs of 5%, 12%, 18% and 28% to be applied on goods and services.
What comes out from the analysis of the initial list of 1,211 items is that a whooping share of 43 per cent goods will be taxed at 18%. Around 14 and 17 per cent items feature in the tax slabs of 5 and 12 per cent respectively. While 7 per cent items will not attract any tax 19 per cent items fall under in the topmost slab of 28 per cent.
Cereals And Other Household Edible Products – If you are a member of the vibrant and ever increasing middle class of the world biggest democracy, India, then GST brings good news for you in terms of the prices of food grains and other daily edible necessities. As per the initial list of items, the prices of food grains are expected to come down as they have been exempted from GST. There are some states where Value Added Tax (VAT) is applied on these cereals. Even when GST will replace the current indirect taxes, no tax will be applied on milk and curd. However, sweets will fall under the lowest tax slab of 5 per cent. The 5 per cent tax slab will also include household products like tea, sugar, edible oil and coffee (except instant coffee) but prices of butter, fruit juice, jam, sugar confectionaries, canned baby food and corn flakes are expected to go up.
Toiletries – Currently 22-24 per cent tax is levied on products of common use which include soaps, hair oil and tooth paste. With the implementation of GST these products will be taxed at 18 per cent. Perfumes and hair dye will be taxed at 28 per cent.
Gadgets – On one hand, mobile phones will cost less as they features in the list of items that are going to be axed at 12 per cent (current tax 20%) and on the other, implementation of GST will see a rise in taxes by 2% for personal computers and laptops as both of them will be taxed at 18 per cent. Buying digital camera will no longer be pocket friendly as it falls under highest tax slab of 28 per cent. Wristwatches along with ACs and refrigerators will also fall under this tax slab.
Cars – If you are craving to buy a car then it will be wise to buy it before the implementation of GST. Apart from the fact that the highest tax slab of 28 per cent will be applied for cars, mid sixed and luxury cars will attract 3 and 15 per cent added cess while for small cars it will be 1 per cent.
Health care and Education – Under the GST regime, financial and health care services will not be taxed at all. Lifesaving drugs will attract only 5 per cent tax.
Financial And Telecom Service – Both financial and telecom services are likely to become costly as both feature in the 18 per cent bracket.
