Common man items to get cheaper under GST; cars, consumer durables to attract 28% tax

Source – economictimes.indiatimes.com

SRINAGAR: The goods and services tax (GST), which is set to be rolled out on July 1, is likely to have a benign effect on household budgets with finance minister Arun Jaitley declaring that its impact “will not be inflationary” and in some instances, prices are even likely to drop. 

A host of daily consumption items such as milk, fruit and vegetables, jaggery or gur, foodgrain and cereals have been exempted from tax while others such as sugar, tea, coffee, edible oil, mithai, and newsprint have been placed in the lowest slab of 5 per cent . 

Luxury cars will attract 28 per cent GST plus a cess of 15 per cent , while small petrol cars will face 28 per cent plus 1 per cent cess, and diesel small cars 28 per cent tax plus 3 per cent cess. Consumer durables, which face a total tax of about 32 per cent now, will be in the 28 per cent slab. 

The GST Council, the apex decision-making body for the new tax, took tangible steps toward finalising the tax framework on day one of its two-day meeting in Srinagar. 

“Tax incidence on none of the commodities will go up and in fact there is a reduction in case of many as tax on tax has gone,” Jaitley, who is also the council chairman, told reporters on Thursday. 

“In case of some goods we have deliberately brought down tax. A number of items that faced 30-31 per cent tax now have been placed in the 28 per cent and 18 per cent slabs.” Revenue secretary Hasmukh Adhia said 81 per cent of the goods will attract tax equal to or lower than 18 per cent . “Of the 1,211 items at the four digit harmonised system of nomenclature, 7 per cent have been exempted, 14 per cent will attract 5 per cent (tax), 17 per cent will face 12 per cent , 43 per cent (will face) 18 per cent and 19 per cent will face 28 per cent,” Adhia said, adding that the overall tax burden on the average household will decline after implementation of GST.