An estimate issued by the finance ministry holds some good news for the devotees across India. The estimate has claimed that goods used in Puja and other Hindu rituals, such as havan, would be exempt when the Goods and Services Tax kicks in from July 1st.
Post Adtiyanath Yogi’s proposal, the GST council has decided to exempt Puja items from GST. “Puja samagri including havan samagri will be under the nil category. However, exact formulation for the same is yet to be finalized,” the Finance Ministry said in a statement.
The same statement also claimed that Ayurvedic and Homeopathic medicines will be slightly cheaper when the new indirect taxation era begins from July 2017. It has been asserted that the tax burden on medicines, including Homeopathic, Ayurvedic, Siddha, Biochemic or Unani, will be cheaper. Presently, these items attract more than 13% tax, including 6% central excise duty and a 5% VAT.
“As against this, the proposed GST rate on medicines, including Ayurvedic medicines, is 12%,” the ministry said.
On a similar note, medical devices and surgical instruments in general attract 6% central excise duty and 5% VAT apart from CST, Octroi and entry tax. Currently, tax incidence on them is more than 13%, which is indeed higher than the proposed 12% GST rate. Similarly, smart phones will also become cheaper in some states as the government has proposed levy of 12% GST, which is slightly less than the cumulative 13.5% of central and state levies. Centre charges 2% central excise duty, VAT at 5-15% varying across states.
The GST Council decided that all the items associated with daily needs will be kept at lower slab. It was also decided that the rates on medicines will be finalized in such a manner that common people’s interest is not harmed. The GST rates are finalized for individual items keeping the levy at 0-5% for most of the food and essential goods, 12% on most manufactured goods, and 18% on many services.
Experts expect the GST rollout may not stoke inflation as more than half the items that make up the consumer price index bracket are either taxed at the lowest rate or exempt.