Union Minister of Finance and Corporate Affairs Nirmala Sitharaman with West Bengal BJP President Samik Bhattacharya, extreme right, and others during a discussion on 'Next Gen GST' reforms, in Kolkata
Credi
The next-generation GST 2.0 reform, being rolled out on a vast number of items are effective from Monday, which Prime Minister Narendra Modi, in his address on Sunday, had described as a ‘saving festival’ (Bachat Utsav). The GST will now be a two-tier structure wherein the majority of goods and services will attract tax of 5 and 18 per cent. A 40 per cent tax will be levied on ultra luxury items, while tobacco and related products will continue to be in the 28 per cent plus cess category.
Till now, Goods and Services Tax (GST) was levied in 4 slabs of 5, 12, 18 and 28 per cent. Besides, a compensation cess is levied on luxury items and demerit or sin goods. So what is cheaper, what is pricier? Let us take a look
Home appliances, electronics
Air conditioners: Items that currently sit in the 28% bracket could be brought down to 18%, making them cheaper.
Large-screen TVs, refrigerators and dishwashers
Large televisions including models above 32 inches will also see reductions ranging from Rs 2,500 to Rs 85,000 depending on the screen size.
Daily use items
Many household products, currently taxed at 12% are expected to move down to the 5% slab.
Toothpaste, soaps and shampoos.
Biscuits, snacks, and juices.
Ghee and condensed milk.
Apparel and footwear below a certain price point.
Automobiles sector
Small cars could come down to the GST slab of 18% from 28%.
Two-wheelers may also move to a lower slab.
Larger luxury cars and SUVs likely to be taxed at higher rates.
Insurance and financial services
Insurance premiums currently draw 18% GST but have been exempted altogether. This would lower costs for households and encourage wider adoption of health and life cover, enhancing financial security
What stays costly?
While about 99 per cent of goods under the 12 per cent GST slab currently will move to 5 per cent, the rejig will also result in 90 per cent of items under the 28 per cent tax slab coming down to the 18 per cent bracket. But not everything is going to be cheaper.
1. Tobacco products, alcohol, and pan masala.
2. Petroleum products remain outside GST for now, meaning fuel prices will not see relief.
3. Luxury items like diamonds and precious stones are also expected to retain higher tax rates.