GST is expected to lower prices of a number of common use items
Highlights
- Government has named some items that will attract lower taxes after GST
- Wheat/rice, unbranded flour, children's drawing books to attract 0% tax
- Few items to attract 9% lesser tax under GST, according to CBEC
GST or goods and services tax became reality with a historic midnight launch on June 30. From July 1, the country stepped into a new regime of GST. While thousands of specific products and services have been accommodated under different GST tax slabs, traders, manufacturers and service providers alike are studying the implications on billing and pricing under the new system. The Central Board of Excise and Customs (CBEC), under the purview of the Department of Revenue, has come out with a list of common use items that will attract lower taxes under GST compared to pre-GST tax incidence.
GST subsumes over a dozen central and local levies including excise duty, service tax, VAT or value-added tax and octroi.
In its list, the CBEC mentioned six items - wheat, rice, unbranded flour, curd/lassi/butter milk, unbranded natural honey and children's picture/drawing/colouring books - where tax incidence has come down to zero per cent compared with pre-GST tax incidence. The Central Board of Excise and Customs also mentioned 10 items which attract 5 per cent tax under GST, compared with a tax incidence of 6-10 per cent earlier. The government body also named few items where GST has lowered tax incidence by as much as 9 per cent. These items include mineral water, hair oil, toothpaste, soap and staplers.
"The pre-GST tax incidence would be higher if the tax incidence on account of CST (central sales tax), octroy, entry tax, etc. (which is more than 2 per cent) is also included," the CBEC said.
Here's a comparison of tax incidence on some times, as given by the CBEC:
| Item | Pre-GST incidence | GST rate |
| Wheat | 2.50% | 0% |
| Rice | 2.75% | 0% |
| Unbranded flour | 3.50% | 0% |
| Curd/Lassi/Butter Bilk | 4% | 0% |
| Unbranded natural honey | 6% | 0% |
| Children's picture, drawing or colouring books | 7% | 0% |
| Ultra high temperature (UHT) milk | 6% | 5% |
| Tea (other than unprocessed green leaves of tea) | 6% | 5% |
| Milk powder | 6% | 5% |
| Sugar | 6% | 5% |
| Sweetmeats | 7% | 5% |
| Vegetable edible oils | 6% | 5% |
| Spices | 6% | 5% |
| Footwear up to Rs 500 | 10% | 5% |
| Kerosene pressure lantern | 8% | 5% |
| Coal | 9% | 5% |
| Ketchup and sauces | 12% | 12% |
| Toppings, spreads (other than mayonaise, salad dressings, mixed condiments and mixed seasonings) | 12% | 12% |
| Mineral water | 27% | 18% |
| Sugar confectionery | 21% | 18% |
| Toothpowder | 17% | 12% |
| LED | 15% | 12% |
| X-Ray films for medical use | 23% | 12% |
| Diagnostic kits and reagents | 16% | 12% |
| Fixed speed diesel engines of power not exceeding 15HP | 16% | 12% |
| Fly ash bricks and fly ash blocks | 16% | 12% |
| Sewing machine | 16% | 12% |
| Hair oil | 27% | 18% |
| Toothpaste | 27% | 18% |
| Soap | 27% | 18% |
| Other footwear | 21% | 18% |
| LPG stove | 21% | 18% |
| Aluminium foils | 19% | 18% |
| School bag | 22% | 18% |
| Printers (other than multifunction printers) | 19% | 18% |
| Staplers | 27% | 18% |
| Tractor rear tyres and tubes | 20% | 18% |
| Helmet | 20% | 18% |
| CCTV | 19% | 18% |
| Baby carriages | 27% | 18% |
| Plastic tarpaulin | 19% | 18% |
| Bamboo furniture | 23% | 18% |
| Headgear and parts thereof | 27% | 18% |
| Cement | 29% | 28% |