GST Bill 2017: The Goods and Services Tax (GST) Council met on Friday and took crucial decisions about taxation of various Goods and Services.
The Goods and Services Act Council planned a 2-day meet on Thursday and Friday to decide about Taxation of various consumer products. The meeting is finished today in the afternoon. This is the biggest Tax Reform in India since Independence of the country in 1947. The GST Act will be applicable from July 1. Large number of goods has been kept under 18%. Around 12111 items have been categorized and tax slabs applied.
NO TAX: Fast moving consumer goods such as milk, fruits and vegetables, cereals and grains, fresh meat, chicken, eggs, butter milk, curd, natural honey, flour, bread, salt, bindi, bangles, sindoor, stamps, newspapers, Handlooms etc have been exempted from tax.
However, Tea, Coffee, Sugar, fish fillet, cream, milk powder, branded paneer, pizza brad, rusk, sabudana, kerosene, edible Oil, stent and life boats will be taxed at 5%. Transport services such as Railways, Air travel and small restaurants will attract 5% tax.
12%: Frozen meat products, cheese, butter, ghee, dry fruits, Bhutia, namkeen, Ayurvedic medicines, agarbathi, coloring books, picture books, umbrella, cell phones etc with attract 12% tax slab.Non-ac hotels, fertilizers, work contracts will also come under 12% tax slab.
18%: Cameras, Speakers, monitors, steel products, notebooks. Envelopes, tissues, mineral water, instant food mixes, ice creams, sauce, jams, cakes, pastries, corn flakes, tooth pastes, soaps and hair oil etc will attract 18% tax slab. A/C Hotels that serve liquor, IT Services, Telecom services, financial services, branded garments also come under 18% tax slab.
28%: Products such as Chewing gum, chocolate, wafers, pan masala, aerated water, paint, shaving creams, deodorants,after shave lotions, shampoos, dye, sunscreens, wallpapers, ceramic tiles, dish washer, Weighing machine, water heater, vacuum cleaners, shavers, hair clips, automobiles etc. attract 28%. Cigarettes will attract 5% on the peak 28%. 5 star hotels, cinema houses, clubs etc will also attract 28% tax slab.
All the daily needed necessary products are exempted from the tax. Other requirements are also nominally taxed. The cost of the goods may not increase much due to the new percentages of GST slabs. For example, Automobiles already attracted more than 28% through various taxes earlier. At present 28% is the peak GST rate. So, it won’t affect automobiles. Air conditioners, Washing Machines, Refrigerators will attract the peak GST rate, which is slightly more than the existing rate. Companies will compensate by increasing the prices on them proportionately. But, these are luxury goods, which are used by only few well-to-do people.
On the whole, the Tax slabs in GST are not going to affect the common man to any considerable degree. There are increased taxes on products of luxury and products which are not good for the society such as alcohol and cigarettes. GST will make it easy to collect tax and will keep the process of taxation simple.