The GST Council has approved historic changes in India’s indirect tax system. After this, many items used in everyday life will become cheaper from September 22.
The new structure will now have two main tax slabs – 5% and 18%, while sin goods like pan masala, gutkha and cigarettes will be taxed at 40%. For the common man, this means that items of daily use will be cheaper and people will have more money in their hands, which will also boost the economy.
Food and drink and everyday items
Milk: UHT milk will now be tax-free (5% earlier), while taxes on condensed milk, butter, ghee, paneer and cheese have been reduced to 5% or zero in some cases.
Cereals and snacks: Tax on malt, pasta, cornflakes, biscuits, chocolate and cocoa products will be reduced from 12–18% to 5%.
Dry fruits: Tax on almonds, pistachios, cashews, hazelnuts and dates reduced from 12% to 5%.
Sugar and sweets: Refined sugar, syrups and sweets like toffees, candies have also now come under the 5% slab.
Other packaged food: Oil, ghee, sausages, meat, fish and malt-based food products will also be taxed at just 5%.
Namkeen, Bhujia, Mixture and Chabena will come down from 18% to 5%.
Packaged mineral water and unsweetened aerated water will also be reduced from 18% to 5%.
Agriculture and Fertilizers
Tax on fertilizers will be reduced from 12–18% to 5%.
Tax on seeds and other agricultural products has also been reduced from 12% to 5%.
Health sector
Taxes on life-saving medicines, medical devices and certain healthcare products reduced from 12–18% to 5% or zero.
There will be no tax on life and health insurance policies now (earlier 12%).
Medical devices like thermometers and glucometers will now be in the 5% slab.
Consumer goods
GST on low-cost electrical appliances reduced from 28% to 18%.
Tax on footwear and clothes reduced from 12% to 5%.
Expensive and prohibited goods
High tax and cess will continue to be applicable on products like pan masala, gutkha, cigarettes, zarda and bidi as before. Their valuation will now be based on retail sale price (RSP) instead of transaction value.
Tax on sugary or flavoured drinks and aerated water has been increased from 28% to 40%.
There will be no tax relief on sin and luxury goods such as cigarettes, premium liquor and luxury cars.
Imported armoured luxury cars will be exempt from tax only in special cases (such as the Presidential Secretariat).
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