By Akash Pandey
Copyright newsbytesapp
The Goods and Services Tax (GST) Council’s decision to cut rates on nearly 375 items will come into effect from tomorrow, September 22. The move is expected to make a wide range of products, including kitchen staples, electronics, medicines, and automobiles, more affordable for consumers. The council has reduced GST rates on essential goods, as well as electronics such as TVs and washing machines. The GST rate cut will benefit a wide range of sectors. Daily-use food items like butter, namkeen, ketchup, jam, dry fruits, coffee, and ice cream will become cheaper. TVs, air conditioners, and washing machines are also expected to see price cuts. Several FMCG companies have already started revising their prices in anticipation of the lower tax burden on these products. The healthcare sector will also benefit from the GST rate cut. Most drugs, formulations, and medical devices, such as glucometers and diagnostic kits, will now attract a tax of 5%. This is expected to ease medicine costs for households. Pharmacies have been directed to either revise the maximum retail price or sell medicines at reduced rates reflecting this tax cut. Builders and homebuyers will also benefit from the GST rate cut, with cement now attracting 18% GST instead of the previous 28%. The automobile sector is set to gain the most from this move. Buyers of small cars will now have to pay an 18% GST while bigger models will attract a tax of 28%, a major reduction from earlier slabs. The services sector, including salons, beauty parlors, yoga studios, gyms, and health clubs, will now be taxed at 5% without input credit. This is a reduction from the earlier 18% with credit. Household staples such as hair oil, soaps, shampoos, toothbrushes, and toothpaste are also expected to become cheaper with tax rates being slashed to 5%. The new GST structure simplifies the tax system into a largely two-rate system of 5% and 18%. Ultra-luxury goods will attract a tax of 40%, while tobacco and related products will remain in the 28% plus cess category. Currently, GST operates in four slabs: 5%, 12%, 18% and 28%, along with a compensation cess on luxury and sin goods.
