gst tax rates

Slashing Spree of GST Tax Rates to Boost Consumption and Growth

GST

It’s been a good time for both consumers and manufacturers as the GST Council is looking to revamp the new indirect tax structure by constantly reducing the rates on various products and services. The GST tax rates, which follow a 4-tier structure of 5%, 12%, 18% and 28%, have changed for the third consecutive time in November 2017. The products are getting moved from the higher slab to lower rates, thus giving rise to a situation of falling prices and boosting consumption.

The news of FMCG companies reducing the prices of their products by 5%-15% is already gaining momentum in media reports. And if the trend of rate slashing continues, there can be plenty more good news for the consumers in the near future. So, how the last three meetings fared for the consumers? Let’s sit to find all that and much more in this article, starting from the recently concluded meeting on November 10, 2017.

23rd GST Council Meet – 178 Items Moved from 28% to 18%

Much in line with the expectations, the 23rd GST Council Meet has decided to slash the rates of 178 items under the top slab of 28% to 18%, bringing down the number of items in the former to just 50. The items include the daily-use items to even machinery. So, let’s find out the items whose GST tax rates are eased to 18% slab.

  • Hair Shampoo
  • Beauty Products
  • Shave and aftershave items
  • Razor and razor blades
  • Furniture
  • Mirror
  • Aluminium Frames
  • Sheets
  • Glassware
  • Bedding
  • Mattress
  • Multi-function printers
  • Cartridges
  • Door
  • Windows
  • Washing and Cleaning Preparations
  • Fat
  • Butter
  • Cocoa
  • Oil Powder
  • Wrist Watch
  • Googles
  • Binoculars
  • Chewing Gum/Bubble Gum
  • Artificial Fruits & Flowers
  • Electrical boards, panels and wired
  • Granite
  • Marble
  • Sanitaryware
  • Chocolates
  • Cutlery
  • Cooker
  • Stove
  • Foliage
  • Suitcase
  • Vanity Case
  • Physical Exercise Equipment
  • Musical Instruments & Their Parts
  • And Others

List of Services Moved to the Lowest 5% GST Tax Rate from Higher Slabs

The council has shifted a few services, which were earlier in 12% and 18% slabs, to the lowest of 5%. Wanna know which are those? Find them out below.

  • Takeaway Food
  • Standalone AC and non-AC Restaurants and those serving liquor
  • Restaurants in hotels with a room tariff less than ₹7,500 (no input credit for these restaurants)

What Happened During the 22nd GST Council Meeting?

The October Meet also brought a reduction of tax rates on as many as 27 items, with some moved to 5% while others fell a slab lower from the earlier. You can check out those items below.

 

        Items                                                       New Rate                                                 Old Rate

 

Khakra and Plain Chapati                                 5%                                                              12%

Unbranded Namkeen                                       5%                                                              12%

Ayurvedic Medicines                                        5%                                                              12%

Food Preparations Put up in

Containers and are Free Distribution            5%                                                              18%

Poster Colour                                                    18%                                                             28%

Modelling Paste for Child                                18%                                                             28%

Amusement

Rubber Waste, Parings or Scrap                     5%                                                               18%

Hard Rubber Waste or Scrap                           5%                                                               28%

Other Announcements

The council decided to allow jewellery purchase above ₹50,000 without having to show PAN Card details, a big move initiated to prop up buying ahead of Diwali. It also announced to introduce e-wallet for exporters by April 1, 2018.

21st GST Council Slashes Rates of More Than 40 Items in September

The GST Council Meeting, which happened in September, decided to slash the tax rates on more than 40 items. These items are idly dosa-batter, broom, walnuts, raincoat, rubber bands, clay idols custard powder, computer monitors, prayer beads, saree fall, dhoop batti, corduroy fabric, etc.

What Else Apart from Rate Cut?

With a view to boosting the business of inter-state handicraft traders, the council has announced to relieve them from GST registration  in case of turnover below ₹20 lakh.

Cess Hike on Cars

Car buyers not only have to deal with the top 28% GST tax rate slab but also the cess while purchasing a model of their choice. In the 21st meeting, the council decided to hike the cess of mid-sized, large-sized and sports utility vehicles (SUVs) by 2%, 5% and 7%, respectively. With the cess hike, the eventual tax rate turns out to be 45%, 48% and 50% for cars in the order of their appearance in the above line.

Vikas Das is one of those expert writers in finance who has enlightened the readers about various banking and investment products like personal loan, home loan, car loan, mutual fund, fixed deposit and others.

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