New Delhi: The roll out of Goods and Services Tax (GST) will bring benefits to the consumers due to reduced tax rates on various commodities such as packaged cement, medicaments, smartphones, and medical devices, etc, making them cheaper.
Packaged cement attracts central excise duty of 12.5% + Rs 125 PMT and standard VAT rate of 14.5%. At these rates, the present total tax incidence works out to more than 29%. If we include tax incidence on account of CST, octroi, entry tax, etc., the present total tax incidence would work out to more than 31%. As against this, the proposed GST rate for cement is 28%.
There will be less tax burden in the case of medicines, including ayurvedic, Unani, siddha, homoeopathic or biochemical systems. Medicines, in general, attract 6% central excise duty and 5% VAT. Further, CST, octroi, entry tax, etc. are applicable in general. At these rates, the present total tax incidence works out to more than 13%. As against this, the proposed GST rate on medicines, including ayurvedic medicines, is 12%.
Smartphone attracts 2% central excise duty [1% excise duty + 1% NCCD]. VAT rates vary from State to State from 5% to 15%. Weighted average VAT rate on smartphones works out to about 12%. Thus, the present total tax incidence on smartphones works out to more than 13.5%. As against this, the proposed GST rate for smartphones is 12%.
Similarly, medical devices, including surgical instruments, in general, attract 6% central excise duty and 5% VAT. Along with CST, octroi, entry tax, etc., the present total tax incidence on them works out to more than 13%. The proposed rate under GST will make these goods cheaper by 1%.
Pilgrimages will not be taxed. Puja samagri, which are things required in Hindu rituals, including havan samagri, will be under the “nil” category. However, exact formulation for the same is yet to be finalised.
Motorcycles and scooters, large cars, sports utility vehicles and several white goods will be cheaper under the GST regime.
Milk, cereals, meat and curd are exempted from the GST.
Branded goods will be cheaper by about 6% (from 24% down to 18%). Tax on hotel stay goes down from 22% to 18% while the food at restaurants will be taxed 6% less.
Hair oil, soaps, movie tickets and air travel will be cheaper, too.
For the list of the entire GST range, refer to this report.