Let us tell you that the government is planning to reduce GST by at least 10 percent on about 175 items. However, there are some amendments which the common man will be especially waiting for. Currently, only two slabs are being proposed from the four slabs of 5%, 12%, 18% and 28%.
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GST Tax Slab: The 56th meeting of the Goods and Services Tax (GST) Council chaired by Union Finance Minister Nirmala Sitharaman has begun in New Delhi today. Major changes in the GST slab, simplification measures and next generation reforms are expected to be discussed in this two-day meeting. So during today and tomorrow, they will decide on what will be cheaper and what will not.
Taxes to be reduced on 175 items
According to a Hindustan Times report, the government is planning to cut GST by at least 10 per cent on about 175 items. However, there are some amendments that the common man will be waiting for. From the current four slabs of 5%, 12%, 18% and 28%, only two slabs are being proposed. 5% for essential goods and 18% for non-essential goods. Apart from this, an additional slab of 40% is likely to be proposed for so-called ‘sin goods’ like tobacco and cars priced at Rs 50 lakh or more.
As per the proposal, 99 per cent of items falling in the 12 per cent category like butter, fruit juices and dry fruits will come under the 5 per cent tax rate. Apart from this, most of the commonly used items like ghee, dry fruits, drinking water (20 litres), namkeen, some shoes and clothes, medicines and medical equipment are likely to be brought from 12 per cent to 5 per cent tax slab. Commonly used items like pencils, bicycles, umbrellas to hair pins can also be brought under the 5 per cent slab.
Here is a list of items on which GST rate is most likely to be cut:
Personal care products: Toothpaste, shampoo, soap, talcum powder
Dairy products: Butter, cheese, buttermilk, paneer, etc.
Ready-to-eat foods: Jams, pickles, snacks, chutneys, etc.
Consumer electronics: ACs, TVs, refrigerators, washing machines.
Private vehicles: Small cars, hybrid cars, motorcycles, scooters.
Most food and textile products will come under the 5% GST.
Zero percent GST proposed on life and health insurance.
According to sources, prices of electronic items like TVs, washing machines and refrigerators of some categories are also likely to come down, as these can be taxed at the rate of 18 percent compared to the current 28 percent. Currently, 28 percent GST is levied on vehicles, but now different rates can be applied on them. An 18 percent rate will be applicable on entry-level cars. While a 40 percent rate will be applicable on SUVs and luxury cars.
Opportunities for these companies
Let us tell you that almost all food and textile products will come under the 5% slab, which can be considered a boost for companies like Hindustan Unilever Limited, Godrej Consumer Limited and Nestle India Limited. According to a Reuters report, the GST Council can also decide to increase the tax on electric cars worth Rs 20-40 lakh from the current 5% to 18%. There are proposals to impose even higher taxes on luxury electric cars such as those made by Tesla Inc and BYD Co.
