GST may hit common man as taxes may increase on edible oils, spices, chicken and decrease on TVs, ACs, fridges and washing machine.
The proposed 4-tier GST structure may hit the common man as it is likely to result in higher taxes on various items including kitchen staples such as edible oils, spices and chicken. The prices of certain consumer durables like televisions, air conditioners, fridges and washing machines may however become cheaper with decrease in taxes. The government plans to roll out the new indirect tax regime, Goods and Services Tax (GST), from April 1, 2017.
In its meeting with states this week, the Centre has proposed a four slab GST rate structure. The lowest rate proposed is 6 %, with two standard rates of 12 and 18 %. The peak rate, which will mostly apply to FMCG and consumer durables, will be 26 %. Besides, a cess is also likely to be levied on demerit or sin goods and polluting items. According to the Centre's estimates on impact of the 4-slab rate structure on CPI inflation, items like chicken and coconut oil which currently suffer a tax incidence of 4 % will be taxed at 6 % under the GST regime. Similarly, the tax burden on refined oil, mustard oil and groundnut oil will go up from 5 % to 6 %.
Other kitchen staples too will be taxed at 6 % as against 3 % in case of turmeric and jeera, 5 % in case of dhania, black pepper and oil seeds. TVs, air conditioners, washing machines, inverters, refrigerators, electric fans and cooking appliances may become cheaper with the incidence of taxes on them declining from 29 % to 26 % post implementation of the GST. Perfumes, shaving cream, powder, hair oil, shampoo, soap, and other toiletry items will become cheaper as they too presently are taxed at 29 %. Gas stove, gas burner, mosquito repellent and insecticide may, however, become expensive as they are currently taxed at 25 %, lower than the proposed peak rate of 26 % under GST.
Under the proposed 4-slab structure, the items which are currently taxed between 3-9 % will fall in the 6 % bracket; those in 9-15 % range will come under 12 % rate. Those products which are currently taxed between 15-21 % would attract 18 % levy, while those above 21 % would be taxed at the peak rate of 26 %. The GST Council, which has Union Finance Minister and his state counterparts, will decide on tax rates next month. Saying that the four tier rate structure was designed in a way that neither the exchequer lose revenue nor does the common man's tax liability increase significantly, Finance Minister Arun Jaitley had said: "the effort will be to fit the goods in the closest tax bracket under GST".
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
 "Representational Image")
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}