GST has been the talk of the town for quite some time now but most people still really don’t understand it. Most of us think that it is a tax system that will make things expensive but that is not the case.
Whenever we have a bill, what we look at is just the total. If you look closely you’ll find a number of taxes imposed, some of which you never even heard of. What GST does is brings all these taxes under one slab. Like it says One Nation One Tax.
Here is all you need to know about GST :
GST Rates Structure
| Tax Rates | Products |
| 5% | Edible oil, sugar, spices, tea, coffee (except instant)Coal (instead of current 11.69%)
Mishti/Mithai (Indian Sweets) Life-saving drugs |
| 12% | Computers, Processed food |
| 18% | Hair oil, toothpaste and soaps (currently at 28%)Capital goods and industrial intermediaries (big boost to local industries) |
| 28% | Small cars (+1% or 3% cess)Consumer durables such as AC and fridge
Luxury & sin items like BMWs, cigarettes and aerated drinks (+15% cess) High-end motorcycles (+15% cess) Beedis are NOT included here |
- In addition to the above, a few other items were mentioned in the Council’s announcement of rates. These items, and the applicable rates on them are as follows:
- Sugar, Tea, Coffee and Edible oil will fall under the 5 per cent slab, while cereals, milk will be part of the exempt list under GST. This is to ensure that basic goods are available at affordable prices. However, instant food has been kept outside this bracket so, no relief for Maggie lovers!
- The Council has set the rate for capital goods and industrial intermediate items at 18 per cent. This will positively impact domestic manufacturers as seamless input credit will be available for all capital goods. Indeed, it is time for “Make In India”.
- Coal to be taxed at 5 percent against current 11.69 per cent. This will prove beneficial for the power sector and heavy industries which rely on coal supply. This will also help curb inflation. Expect a good run for Coal India tomorrow.
- Toothpaste, hair oil, and soaps will all be taxed at 18 percent, where currently they are taxed at 28 percent. Most of the cosmetics and fast moving consumer goods (FMCG) brands should get the benefit of this tax reduction. After all, Fair and Lovely might seem fairer in its pricing from now on!
- The ‘mithai’ from the neighbouring sweet shop might lose some of its flavour as Indian sweets will now be taxable at 5 per cent. If you have a sweet tooth, this could hurt your pocket a wee bit in the coming days.
Plus, it was announced that:
- for restaurants serving alcohol, the tax bracket will be 18 per cent
- education, healthcare are going to be exempted from GST
- services on Non-AC restaurants will be 12 per cent.
Don’t worry, the Nation needs GST.
