On Wednesday, the GST Council approved historical changes in India’s indirect tax system. Now two new tax structures of 5% and 18% will be adopted. Its effect will be seen from September 22, when many everyday important things will become cheaper. There will be relief in areas such as grocery, manure, shoes, slippers, clothes, even renewable energy. Most of the goods coming in the first 12% and 28% tax slab will now come into these two new slabs.
Food and important goods
Milk Products: Now UHT (packed) milk is tax-free (earlier 5%). Condensed milk, butter, ghee, cheese and cheese have come down from 12% to 5% or in some cases on zero tax.
Cereals and packaged food: Malt, starch, pasta, cornflakes, biscuits, chocolate and cocoa products decreased from 12–18% to 5%.
Dry fruits and dry fruits: almonds, pistachios, hazelnuts, cashews and dates will now be taxed only 5% (earlier 12%).
Sugar and sweets: Sweets like refined sugar, syrup, toffee, candy will now be in 5% tax slab.
Other packaged foods: Packaged foods with oil, ghee, spreads, sausage, meat, fish products and malt-interrupt in 5% slab.
Namkeen and Snacks: Eating food items like salty, bhujia, mixture, chabena (except roasted gram) decreased from 18% to 5%.
Water: Natural mineral water and non -sugar/flavored ared water decreased from 18% to 5%.
Agriculture and fertilizer
Tax on fertilizer decreased from 12% and 18% to 5%.
GST on seeds and other agricultural inputs was also reduced from 12% to 5%.
Health services
Life saving medicines, health related materials and some medical devices decreased from 12%/18% to 5% or zero.
Consumer goods
Cheap/entry level electrical appliances decreased from 28% to 18%.
Shoes and slippers and clothes come down from 12% to 5%.
High tax goods (without changes)
High tax and compensation cess will still continue on pan masala, gutkha, cigarette, chewing tobacco, zarda, bidi etc.
Now their valuation will be on the retail cell price (RSP) instead of the transaction value, which will strict tax.
40% tax slab
The goods that have been mixed with sugar or sweetener, flavor ared drinks, will now increase from 28% to 40%.
40% tax will be applicable on luxury and sin goods (cigarette, premium liquor, high-end cars).
Imported bulletproof luxury cars will be free from tax only under special circumstances like the President’s Secretariat.