From Ice Cream To Air-Conditioners: What Gets Cheaper In GST 2.0

The Goods and Services Tax (GST) system is undergoing a significant overhaul, with the new structure set to take effect on September 22. This "next-gen" reform, known as GST 2.0, aims to simplify the tax framework, reduce consumer prices on essential goods, and rationalise tax rates across various sectors.

Under the new GST framework, tax rates have been consolidated into three primary slabs: 5 per cent for essential goods and services, 18 per cent as the standard rate for most goods, and 40 per cent for luxury or "sin" items such as high-end automobiles, tobacco, and alcohol.

Here's What Gets Cheaper In GST 2.0

Food And Beverages

• Chapati, paranthas, ultra-high temperature milk, chena/paneer, pizza bread, khakra: Zero tax.
• Common items (butter, ghee, dry nuts, sausages, meat, sugar confectionery, jam, fruit juice, ice cream, biscuits, cereals): 5 per cent.
• Plant-based and soya milk drinks: 5 per cent.
• Other fats and cheese: 5 per cent.

Beauty And Fitness Services

• Salons, spas, gyms, health clubs, yoga: 5 per cent.

Household And Personal Care

• Tooth powder, shampoo, talcum powder, toothpaste, toothbrushes, soaps, hair oil, kitchenware, tableware, utensils, umbrellas, bicycles, bamboo furniture: 5 per cent.
• Consumer electronics (Air-Conditioners, TVs, dishwashers): 18 per cent.

Stationery And Footwear

• Maps, charts, globes, pencils, crayons, exercise books, erasers: no tax.
• Footwear and textiles: 5 per cent.

Healthcare

• Life-saving drugs, medical devices, thermometres, oxygen, diagnostic kits, glucometers, corrective spectacles: 5 per cent or nil.

Insurance And Travel

• Life and health insurance: Zero tax.
• Third-party goods vehicle insurance: 5 per cent.
• Hotel rooms up to Rs 7,500, economy flight tickets: 5 per cent.

Vehicles And Auto Components

• Motorcycles up to 350 cc: 18 per cent, down from 28 per cent.
• Small hybrid cars: benefit from lower rates.
• Electric vehicles: 5 per cent GST.
• Auto components: 18 per cent, down from 28 per cent.
• Small petrol, LPG, CNG vehicles and diesel up to 1,500 cc: 18 per cent.

Construction And Machinery

• Cement: 18 per cent.
• Sewing machines and parts: 5 per cent.
• Agricultural machinery, trailers, fertiliser inputs, biopesticides, tractor components: 5 per cent.

The new GST structure also introduces updated tax schedules, categorising goods and services to ensure clarity and uniformity in tax application.