For Several daily consumable food grains and agri product, GST sets to be @ 0%, making almost 50% items of CPI basket under NO Tax bracket, will make GST pocket friendly to common middle class.
While the lists are yet to be rolled out by the GST Council, all essential commodities and services, including education and health care should feature in the list of special concessional rate of 5 percent (if not zero rated). The FM has mentioned that highest tax slab rate applicable to items currently taxed at 30% to 31% (excise duty plus VAT) will be taxed at a demerit rate of 28%.
Some of the goods taxed at 28% will be charged with an additional cess for five years. luxury and sin goods (eg cigarettes and alcohol) will attract cess in addition to the GST.
However, with use of best estimates and some publicly available information, the likely impact on MRP of the products can be summarised below:
The finance minister said the burden on the consumer would “hopefully” be lower. He said instead of the current slab of 30-31% on products such as white goods, which includes excise duty of 12.5% and state VAT of 14.5%, the highest slab under GST will be 28%.
It is likely most of services will be taxed at 18% instead of present 15% Service Tax., however impact of this may not be 3% if service provider passon reduced cost due to input credit available now under GST.
Sources :: Times of India, Economic Times, Hindustan Times