Prices will change after the Goods and Services Tax (GST) is implemented from July 1, 2017. While the GST rates released by the government do not hurl any major surprises for most products, it is still early to comment on the overall effect of the new tax law. The GST council, the body responsible for coming out with a set of rates, has finalized tax slabs for goods of consumption.
While 7% items are exempt, 14% are in the lowest bracket of 5%. Around 17% items are in 12% tax bracket, 43% in 18% and 19% in the top tax bracket of 28%. This translates into the fact that a majority of the items will have 18% or less GST.
No GST tax slab
Foodgrains, milk and other articles of daily use have been exempted from taxation under the GST regime.
foodgrains | gur | milk | eggs | curd | lassi | unpacked paneer | honey | vegetables | fruits | atta | besan | maida | vegetable oil | common salt | contraceptive | bread | stamp | books | bangles
5% GST tax slab
Items of daily use: sugar | tea | coffee | edible oil | coal | milk powder for babies | paneer | newsprint | LPG | kerosene | spices | juice | medicines
12% GST tax slab
Non-essential items: butter | ghee | mobile phones | agarbatti | mixtures | ayurvedic medicines | tooth powder | sewing machine
18% GST tax slab
Other items: hair oil | soap | toothpaste | corn flakes | jams | ice-cream | toilet paper | iron and steel | mineral water | camera |
28% GST tax slab
Luxury goods or health hazards: consumer durables | cars | cement | chewing gum | custard powder | pan masala | perfume | shampoo | cosmetics | fireworks | motorcycles | paint | deodorant | hair dye | washing machine | vacuum cleaner | dish washer
What gets Cheaper
There is little doubt that foodgrains, cereals, and milk will cost less from July 1. Currently, many states charge VAT on food grains including wheat and rice and milk products. However, sweets will attract 5% GST. Common use items hair oil, soaps and toothpaste will be charged at 18 per cent. Sugar, tea, coffee and edible oil will attract 5%.