GST 2.0 has come into force in India from today. Under this new rule, the old four slab system of Goods and Service Tax (GST) has been abolished. The new system has only two main rates 5% and 18%. A separate rate of 40% has been kept for “Sin Goods” like luxury and cigarettes.
This is considered to be the biggest improvement after the implementation of GST in 2017. This will also affect Indian families and businessmen who send money from UAE, buy Indian goods or invest there.
Know what happened cheap
Essential items: Shampoo, toothpaste, hair oil, soap and dental floss will now be 5% GST instead of 18%.
Packed Snacks: Tax on Namkeen, Bhujia, Mixter and Ready-to-Eat Food has come down from 12% to 5%.
Dairy and FMCG: Amul has reduced prices. 100 grams of butter will now be available in ₹ 58 (first ₹ 62). UHT milk is ₹ 75 per liter. Mother Dairy has also reduced the prices of cheese, ghee and milkshakes.
Insurance: No GST will be imposed on life insurance and health insurance policies.
What is the increase in the price of things
Tobacco products: Cigarettes, gutkha, paan masala and chewing tobacco are now more expensive than 40% GST instead of 28%.
Luxury cars: Expensive vehicles with large engines will now be 40% in slabs.
Sweet drinks: Flavor soda and cold drinks will also be taxed at 40%.
Alcohol: Still is out of GST and the states will take separate tax.
Will the same remain
5% on road transport and 5% tax on air travel will remain the same.
New rates will also apply to imported goods.
The old stock will not have to be withdrawn, just billing will have to be done at a new rate.
Impact on companies
The demand for FMCG companies like Hindustan Unilever and Dabur may increase.
Companies such as tobacco -making ITC will be under pressure.
Retail and e-commerce may increase everyday goods sales.
Benefits for those living in UAE
The money sent to India will have more effects because the essential things have become cheaper here.
Indian snacks and dairy products can also be found cheap after some time in UAE shops.
Those investing in Indian shares or mutual funds may see better growth in FMCG companies, while tobacco companies may have weakness.
The insurance policy purchased in India will now be cheaper because it does not have GST.
Prime Minister Modi has called it a “GST savings festival” and described it as a big step for the country on the beginning of Navratri.