From list of 1211 items, GST tax rate for 1205 goods is released & it looks that it’s time for the businesses to evaluate their cut over planning and formulate their pricing strategies in view of the transition to GST.
Overall the announcement has been positive & looks well thought of, by putting commonly used products under 5, 12 or 18% slab which in existing scenario was up to 22-24%. For ex: Products like Hair oil, toothpaste, soaps were charged at 22-24% rate which has been reduced to 18%.
We have tried to share as under 2 areas of key importance regarding GST tax rate for goods & services :
A ) What is in the list of item wise tax rates for us?
- Milk and curd will continue to be exempt from taxation in GST too.
- Mithai or sweets will attract 5 per cent levy.
- Daily-use items like sugar, tea, coffee (barring instant coffee) and edible oil will attract the lowest tax rate of 5 per cent, almost the same as current incidence.
- Prices of wheat and rice, will come down as they will be exempt from GST if not packed in container & not branded too.
- Aerated drinks like Coke, Pepsi, 7 up, Mazza etc.and cars will be in the 28 per cent bracket.
- All the category of cars whether small, mid size or large will attract common rate of 28% but cess will vary in each category. Small size will have 1 per cent cess, mid-sized cars will attract 3 per cent and luxury cars 15 per cent.
- Aerated drink will have cess of 12% over & tax rate of 28%.
- White goods like ACs and refrigerators will fall in the 28 per cent tax slab.
- Motor Cycles with > 350 cc engine shall also pay cess of 3 % over the tax rate of 28%.
- Life-saving drugs have been kept at 5 per cent rate.
In the overall basket, it looks that item wise tax rate has been reduced in GST for majority of items.
The list of exemptions in GST has been substantially trimmed as compared to the existing regime, with only 7% of total items indicated to be kept nil-rated.
This will broaden the tax base & also some new sectors have been introduced to tax compliance.
B) Which Goods are exempt under GST?
- Live Animals other than live horses.
- Meat and edible meat offal, except the one’s frozen & kept in unit container.
- Fish, crustaceans, molluscs & other aquatic invertebrates. These are all Aquatic species.
- Dairy produce excluding flavored milk ; bird’s eggs; natural honey; edible products of animal origin, not elsewhere specified
- Products of animal origin, not elsewhere specified or included
- Live trees and other plants
- Fresh Edible vegetables, roots and tuber, except the frozen & container ones.
- Fresh Edible fruit and nuts; peel of citrus fruit or melons, except the frozen & container ones.
- Coffee, tea & spices of seed quality , not roasted & processed
- Cereals, other than the ones contained in a container & bearing a registered trade name
- Products of milling industry; malt; starches; inulin; wheat gluten, other than the ones contained in a container & bearing a registered trade name.
- Vegetable plaiting materials like betel leaves; vegetable products, not elsewhere specified or included
- Sugar and sugar confectionery, gur (jaggery)
- Preparations of cereals, flour, starch or milk; pastry cooks’ products
- Miscellaneous edible preparations, like prasadam supplied by religious places
- Beverages, spirit and vinegar, other than aerated, mineral, purified, distilled, medicinal, ionic, battery, de-mineralized water sold in sealed container, alcohol.
- Residues and waste from the food industries; prepared animal fodder.
- Salt; sulphur; earths and stone; plastering materials, lime and cement.
- Pharmaceutical products i.e. human blood & it’s component , All type of contraceptives.
- Fertilisers: Organic manure, other than put up in unit containers and bearing a brand name.
- Essential oils and resinoids like kumkum, bindi, alta.
- Miscellaneous chemical products: Municipal waste, sewage sludge, clinical waste.
- Plastics and articles thereof
- Rubber and articles thereof
- Fire Wood and articles of wood, wood charcoal used for fuel.
- Paper and paperboard; articles of paper pulp, of paper or of paperboard: Judicial, Nonjudicial stamp papers, Court fee stamps when sold by the Government Treasuries or Vendors authorized by the Government, Postal items, like envelope, Post card etc., sold by Government
- Printed books, newspapers, pictures and other products of the printing industry, manuscripts, typescripts and plans.
- Ceramic products: Earthen pot & clay lamps
- Glass and glassware: Bangles (except those made from precious metals)
- Tools, implements, cutlery, spoons and forks of base metal; parts thereof of base metal: Agricultural implements manually operated or animal driven.
- Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof: Hand loom
- Aircraft; spacecraft and parts thereof: Spacecraft (including satellites) and suborbital and spacecraft launch vehicles
- Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof: Hearing aids
- Musical instruments; parts and accessories of such articles: Indigenous handmade musical instruments
- Project imports, laboratory chemicals, passengers’ baggage, personal importation, ship stores: Passenger baggage.
Therefore this is essential for the businesses, so they can evaluate. Accordingly undertake cut over planning and formulate their pricing strategies in view of the transition to GST.
Chartered Accountant, GST Consultant
About us: I am the co-founder of GST Insights. Our consultancy & solutions are focused on GST, based on industry requirements. To know more refer http://www.gst-insights.com