How Revised GST Rates Will Help You Cut Down Kitchen Expenses

Finance Minister Nirmala Sitharaman on Wednesday announced key revisions to the Goods and Services Tax (GST) rates, bringing relief to middle and lower-income groups.

The new framework will now have two slabs - 5% and 18% - replacing the earlier four slabs of 5%, 12%, 18% and 28%. A special 40% slab has been proposed for a select category of items such as high-end cars, tobacco, and cigarettes, which are considered luxury or sin goods.

Under the new system, several food essentials have been placed under the lower tax bracket. Items such as milk, paneer, rotis, khakhras, parathas, pizza bread, butter, ghee, packaged juices and nuts will now attract lower GST.  

Announcing the new slabs, Ms Sitharaman said several items, including televisions, air-conditioners, and bikes under 350 cc, used by the middle class, have been brought under 18%.

GST rates of food essentials

Roti and Parathas:

Bread was already exempted, while pizza bread, roti, paratha, etc attracted different rates. Under the new framework, all forms of chapati and parathas will be excluded from the current rate of 5%.

Ultra-high temperature milk, paneer and khakra:

All dairy milk, other than UHT milk, was exempted from GST. Except for soy milk drinks, plant-based milk beverages were subject to 18% GST, whereas soy milk drinks were subject to 12% GST. Under the new system, plant-based milk beverages and soy milk beverages are now subject to a 5% GST.

Everyday essentials:

A wide range of everyday groceries and snacks has become more affordable, especially dairy items, desserts, and breakfast cereals. Butter, ghee, nuts, condensed milk, sausages, meat products, jams, jellies, coconut water, namkeen, ice cream, pastries, biscuits, cereals, corn flakes, fruit juices and packaged drinking water (20-litre bottles) will now attract 5% GST, instead of the earlier 18%.

Among other items, vegetable oils, animal fats, edible spreads, sausages, meat preparations, fish products, and malt extract-based packaged foods will henceforth attract a 5% GST.

Namkeens, bhujia, mixture, chabena and other ready-for-consumption edible preparations - excluding roasted gram - pre-packaged and labelled will move from the 18% to 5% tax slab.