GST 2.0 came into effect in India today, with new rates of 5% and 18%. The 12% and 28% rates have been eliminated. Luxury goods will be taxed at 40%, while everyday items will remain tax-free. Electronics will become cheaper as the tax rate has been reduced from 28% to 18%. The GST rate on mobile phones and laptops will remain at 18%.
GST 2.0: A new tax slab, GST 2.0, has been introduced in India from today. The GST Council meeting on September 3rd announced the implementation of two GST rates: 5% and 18%. The 12% and 28% rates were removed from the GST list. Instead, a third rate of 40% was added, applicable to luxury goods. Meanwhile, many everyday items were made tax-free.
The new GST rates will be implemented nationwide from today. This will have the greatest impact on the electronics sector. Air conditioners, refrigerators, washing machines, dishwashers, and large-screen TVs, which previously were taxed at 28%, will now be taxed at 18%. Consequently, these items will become cheaper, making them more affordable for middle-class families.
Mobile phones and laptops will continue to be taxed at 18%. In such a situation, people waiting for mobile phones and laptops to become cheaper will have to depend on seasonal offers.
New GST Slabs
5% – Everyday Goods
18% – Standard Goods like Household Appliances and Electronics
40% – Luxury Items
Impact on Electronics and Household Items
Air conditioners and dishwashers are expected to see a price reduction of ₹3,500-₹4,500 per unit.
Refrigerator and washing machine prices are expected to fall by 8-9%.
Large screen (more than 32-inch) TV prices are also expected to see a significant drop.
Mobile Phones and Laptops
The reduction in GST rates will not impact the prices of mobile phones and laptops. These items will remain taxed at the same 18% rate as before. This is because mobile and laptop manufacturing companies already benefit from the Production Linked Incentive (PLI) scheme. However, after the import duty adjustment, these items were placed in the 18% tax slab. Reducing the tax on these items now could prove to be a loss-making proposition.
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