GST Revamp: What's Cheaper, Costlier? See Full List Here

The Goods and Services Tax (GST) Council on Wednesday approved a complete overhaul of India's tax consumption tax since its launch in 2017, slashing duties on household essentials, medicines, small cars and appliances and affecting everything from toothpaste and insurance to tractors and cement. 

The council approved the rate overhaul by limiting slabs to 5 per cent and 18 per cent, as the Centre seeks to boost domestic spending and cushion the economic blow of the US tariffs imposed on Indian goods. 

The council reduced the current four slabs - 5, 12, 18 and 28 per cent - to the two-rate structure of 5 per cent and 18 per cent.  A special 40 per cent slab is, however, proposed for a select few items such as high-end cars, tobacco and cigarettes. 

The new rates for all products, except pan masala, gutkha, cigarettes, chewing tobacco products like zarda, unmanufactured tobacco and bidi, will be effective September 22.

What Gets Cheaper?

Food and beverage

1. All forms of chapati and paranthas will be charged nil tax, down from the current rate of 5 per cent.
2. Tax rate has also been slashed to nil from 5 per cent on ultra-high temperature milk, chena or paneer, pizza bread and khakra.
3. Common use food items and beverages, ranging from butter and ghee to dry nuts, condensed milk, sausages and meat, sugar boiled confectionery, jam and fruit jellies, tender coconut water, namkeen, drinking water packed in 20-litre bottles, fruit pulp or fruit juice, beverages containing milk, ice cream, pastry and biscuits, corn flakes and cereals, and sugar confectionery, with a cut in tax rate to 5 per cent from the current 18 per cent.
4. GST on other fats and cheese has also been reduced to 5 per cent from 12 per cent.
5. Plant-based milk drinks will become cheaper with the GST rate being reduced to 5 per cent from 18 per cent earlier, while that of soya milk drinks has also been cut to 5 per cent from 12 per cent.

Household items

1. Items such as tooth powder, feeding bottles, tableware, kitchenware, umbrellas, utensils, bicycles, bamboo furniture and combs, as it will see a rate cut from 12 per cent to 5 per cent.
2. Shampoo, talcum powder, toothpaste, toothbrushes, face powder, soap and hair oil, with a cut down to 5 per cent from 18 per cent.

Household appliances

1. Consumer electronics like air-conditioners, dishwashers, and TVs will be taxed at 18 per cent from the current 28 per cent.

Stationary items

1. Maps, charts, globes, pencils, sharpeners, crayons and pastels, exercise books and notebooks will be charged at nil from 12 per cent.
2. Similarly, erasers will be charged at nil from 5 per cent.

Footwear and textiles

1. Footwear and textiles have seen GST cut from 12 per cent to 5 per cent, reducing costs for mass-market products.

Healthcare

1. Life-saving drugs, health-related products, and some medical devices have seen rate cuts from 12 per cent/18 per cent to 5 per cent or nil.
2. The rate on thermometers has been slashed from 18 per cent to 5 per cent, on medical grade oxygen, all diagnostic kits and reagents, glucometer and test strips and corrective spectacles from 12 per cent to five per cent. 

Insurance and policies

1. Individual life and health insurance policies to attract nil tax.
2. Supply of service of third-party insurance of goods carriage will now attract 5 per cent with input tax credit (ITC) from 12 per cent with ITC.

Hotel tariffs and flights

1. The GST has been lowered from 12 per cent with ITC to 5 per cent without ITC. The tax on rooms up to Rs 7,500 has been reduced to 5 per cent.
2. Economy class tickets to attract just 5 per cent GST.

Vehicles, auto components

1. Motorcycles up to 350 cc will be taxed at 18 per cent as against 28 per cent currently.
2. Small hybrid cars will also benefit, while Electronic vehicles will continue to be charged at 5 per cent GST.
3. GST on auto components has been reduced to 18 per cent from the current 28 per cent slab.

Fuel usage

1. Petrol, LPG and CNG vehicles of less than 1,200 cc and not more than 4,000 mm length and diesel vehicles of up to 1,500 cc and 4,000 mm length, too, would move to 18 per cent rate from 28 per cent.

Construction

1. Cement will cost less with the tax rate coming down from 28 per cent to 18 per cent. 

Sewing machines and parts

1. GST rate has been slashed from 12 per cent to five per cent

Agricultural machinery

1. The rate has been slashed from 12 per cent to 5 per cent on various agricultural machinery, including fixed speed diesel engines of power not exceeding 15HP, hand pumps, nozzles for drip irrigation equipment and sprinklers, agricultural and horticultural machinery for soil preparation, harvesting and threshing machinery, composting machines and tractors (except road tractors for semi-trailers of engine capacity more than 1800 cc).
2. The rate will also apply to self-loading agricultural trailers and hand-propelled vehicles like hand carts.
3. GST on key fertiliser inputs, including sulphuric acid, nitric acid and ammonia, has been reduced from 18 per cent to 5 per cent.
4. Various biopesticides including Bacillus thuringiensis variants, Trichoderma viride, Trichoderma harzianum, Pseudomonas fluoresens, Beauveria bassiana, NPV of Helicoverpa armigera, NPV of Spodoptera litura, neem-based pesticides and Cymbopogan to get cheaper as GST has been reduced from 12 per cent to 5 per cent. 
5. GST has also been reduced to 5 per cent on micro-nutrients covered under the Fertiliser Control Order, 1985.
6. Comprehensive tractor components, including rear tractor tyres and tubes, agricultural diesel engines of cylinder capacity exceeding 250 cc for tractors, hydraulic pumps for tractors, and various tractor parts such as rear wheel rim, centre housing, transmission housing, front axle support, bumpers, brake assembly, gear boxes, trans-axles, radiator assembly and cooling system parts, to get cheaper with a reduction from 18 per cent to 5 per cent.

Beauty and physical well-being services 

1. Services of health clubs, salons, barbers, fitness centers, yoga, etc. will attract a GST rate of 5 per cent without ITC. These services attracted 18% GST earlier.

What Gets Costlier?

Aerated, caffeinated drinks

1. Popular soft drinks, such as Coca-Cola and Pepsi, along with other non-alcoholic beverages, will become costlier, with the council approving a hike in tax rate on carbonated beverages to 40 per cent from the current 28 per cent.
2. Caffeinated beverages to be charged 40 per cent from 28 per cent.
3. Other non-alcoholic beverages will also become costlier, as the GST rate on these items has been increased to 40 per cent from 18 per cent.
4. All goods (including aerated waters) containing added sugar or other sweetening matter or flavoured to be taxed 40 per cent from current 28 per cent.

Vehicles

1. All automobiles above 1,200 cc and longer than 4,000 mm as well as motorcycles above 350 cc, yachts and aircrafts for personal use, and racing cars will attract a 40 per cent levy.

Tobacco items

1. Tobacco and tobacco-related products will continue to be subject to a 28 per cent GST rate plus a compensation Cess till the time the loans taken to compensate states for loss in revenue during the Covid-19 pandemic are repaid. Once that ends, tobacco and tobacco-related products will be subject to a 40 per cent GST rate.

Leisure activities

1. The 40 per cent tax will also be levied on services by a race club, leasing or rental services, and casinos/gambling/horse racing/lottery/online money gaming. IPL tickets also fall under this slab.