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What gets cheaper from Monday as GST rate cut takes effect? Full list
Ahead of the GST reforms, popular dairy brand Amul has slashed retail prices of more than 700 products.
Prices of daily items will be reduced further after Goods and Services Tax (GST) reforms rollout, Prime Minister Narendra Modi said on Sunday in his address to the nation. The reforms will come into effect from Monday, September 22, a move that he termed as “GST bachat utsav”.
“Tax slabs of 5% and 18% only will be applied,” Modi said as he declared announced the roll out of “next generation GST reforms” from tomorrow.
Prices of articles such food items, medicines, soap, toothbrush, toothpaste, health and life insurance will be slashed, Modi said.
The reforms will come into effect from Monday, September 22, prices of almost hundreds of items ranging from kitchen staples to electronics, automobiles are expected to be revised. “Entities like these will be either tax-free or the tax rates will be reduced,” he said.
Almost 99% of the that earlier attracted 12% GST will now come under 5% slabs.
As a reprieve for the consumers, the GST Council that comprises Centre and states, has decided to reduce tax rates on goods and services.
Apart from essential items such as medicines and food, automobile, wellness and toiletries will become cheaper from Monday.
Currently, GST is levied in four slabs. For essential goods the rate is 5%, 12% for standard goods/services such as processed foods, cell phones, butter, ghee, some household appliances, 18% on goods and services such as Electronics, branded garments, restaurant services, personal care items.
On luxury and demerit goods such as automobiles, ACs, refrigerators, luxury items, tobacco products the tax is 40%. Besides, a compensation cess is levied on luxury items and demerit or sin goods.
After September 22, GST will be a two-tier structure wherein majority of goods and services will attract tax of 5 and 18 per cent. A 40 per cent tax will be levied on ultra luxury items while tobacco and related products will continue to be in the 28 per cent plus cess category.
What all gets cheaper from September 22?
- Medicines- Earlier taxed at 12%, medicines will be cheaper as the tax has been slashed to 5%. Additionally, 36 critical life-saving drugs for cancer, genetic and rare diseases, and cardiovascular conditions have been fully exempted
- Medical devices and diagnostic kits-The GST has been reduced to 5%
- Mass consumption items like ghee, paneer, butter, 'namkeen', ketchup, jam, dry fruits, coffee and ice creams, and aspirational goods like TV, AC, washing machines.
- Cement- GST has been reduced to 18% from 28%.
- Cars- GST on big cars will now be 28% and 18% on small cars. Several car companies have already announced reduction in prices.
- Air conditioners and dishwashers.
- Health clubs, salons, barbers, fitness centres, yoga- GST has been slashed from 18 per cent with Input Tax credit (ITC), to 5 per cent without tax credit.
- Hair oil, toilet soap bars, shampoos, toothbrush, toothpaste, too are likely to get cheaper as tax on them has been cut to 5% from 12/18%
- Talcum powder, face powder, shaving cream, after-shave lotion- GST has come down to 5 per cent, from 18 per cent.
- The price of a 1-litre bottle of Rail Neer has been reduced from ₹15 to ₹14, while the price of a 500 ml bottle has been brought down from ₹10 to ₹9.
Meanwhile, the Gujarat Cooperative Milk Marketing Federation, which markets dairy items under the brand Amul, announced a reduction in retail prices of more than 700 product packs. This decision was taken to ensure the benefits of the GST rate cut reach the customer. It includes ghee, butter ice cream, bakery and frozen snacks. The new prices will be effective from September 22.
Earlier, Union finance minister Nirmala Sitharaman had said with the slew of GST reforms set to come into effect from September 22, a total of ₹2 lakh crore will be in the hands of the people, boosting domestic consumption.
With the simplification of the Goods and Services Tax from the earlier four slabs to 2 slabs, Sitharaman said Prime Minister Narendra Modi is keen to ensure that the poor and downtrodden, middle class families and the micro, small and medium enterprises (MSMEs) largely benefit out of the GST reforms.
