New Delhi: GST tax rates for items for common use ranging from hair oil to corn flakes, TVs and personal health and life insurance policies were lowered after the Almighty GST Council approved a complete overhaul of the Tangled Goods and Services Tax Regime on Wednesday.
The GST -Council approved tariff overseeing by limiting plates to 5 percent and 18 percent from September 22, the first day of Navaratri.
Almost all articles for personal use will see the cuts, because the government wants to stimulate domestic expenses and confirm the economic blow of the American rates.
Briefing from reporters after a marathon day -long GST council meeting, said the Minister of Finance Nirmala Sitharaman of the Union, said that all decisions were made unanimously, without disagreing with any state.
The panel approved the simplifying of the goods and service tax (GST) of the current four plates-5, 12, 18 and 28 percent to a two-row-structure-5 and 18 percent. A special album of 40 percent is also presented for a select number of items such as high-end cars, tobacco and cigarettes.
The new rates for all products, except Gutkha, tobacco and tobacco products and cigarettes, will be in force on September 22 – the first day of Navratri, she said.
While daily use food items will continue to attract nil tax rate, common use food 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 spone is likely to see a reduction in the tax rate to 5 percent compared to the current 18 percent.
All forms of Chapati and Paratha are charged zero tax, at the current rate of 5 percent.
Consumer goods such as tooth powder, food bottles, crockery, kitchen utensils, umbrellas, kitchen utensils, bicycles, bamboo furniture and combs will speed up the rate from 12 percent to 5 percent. The speeds on shampoo, talcum powder, toothpaste, toothbrushes, face powder, soap and hair oil have been reduced to 5 percent of 18 percent.
Sitharaman said that all individual life and health insurance policies will now attract zero tax in an attempt to increase coverage.
Cement costs less with the tax rate that falls from 28 percent to 18 percent. Gasoline, LPG and CNG vehicles of less than 1,200 cc and no more than 4,000 mm length and diesel vehicles of up to 1,500 cc and 4,000 mm length would also move to 18 percent of 28 percent.
All cars that are larger than 1,200 cc for gasoline and 1500 cc for diesel will be charged at 40 PC, the Minister of Finance said.
Motorcycles up to 350 cc, consumer electronics such as air conditioners, dishwashers and TVs will also be taxed on a lower GST of 18 percent at 28 percent currently.
All cars above 1200 cc and longer than 4,000 mm as well as motorcycles above 350 cc, yachts and planes for personal use, and racing cars will attract a levy of 40 percent.
EVS will be charged at 5 percent GST.
The financial implication of the rationalization of the rate would be RS 48,000 crore and this would be for tax purposes, told income secretary Arvind Shrivastava reporters here.
The decision of the GST Council would lower the total premium because the tax component fell considerably.
The government has collected RS 16,398 Crore of goods and service tax (GST) on health care and life insurance in FY24.
Of these, RS 8,135 Crore from Life Insurance and RS 8,263 Crore of health insurance. In addition, RS 2,045 Crore was also picked up as GST of reinsurance on life and the health insurance policy of the last tax taxation, including RS 561 crore of reinsurance on life and RS 1,484 crore about healthcare.
The step to simplify the tax regime – announced for the first time by Prime Minister Narendra Modi in his speech of Independence Day – comes when the export from India to the US is a rate of 50 percent – the highest in the world.
The Indian economy is highly dependent on consumption with private consumption accounts for 61.4 percent of the last tax GDP.
The GST reforms will probably increase the economy to 0.5 percentage points by the second year of its implementation, which effectively neutralized the full impact of the American rate, said economists.
Tobacco, Gutkha, tobacco products and cigarettes will be charged on the current 28 percent plus a compensation walling to such that loans that are taken to pay states for income loss are fully repaid, Sitharaman added.
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