The new GST Regime brought with it a slew of overarching impacts on a multitude of commercial sectors. The consolidation of various levies into a singular structure has affected almost every aspect of consumption in our lives, hence, we are doing a series of blogs about the Impact of GST across various sectors such as consumer, automobile, IT, banking, the stock market, healthcare etc.
The first topic in this series is the Impact of GST on Consumer Goods, so let’s take a look at how GST affects the day to day spending and the pockets of the common man:
- Goods Exempted from GST:
Most of the essential goods such as unprocessed cereals (rice, wheat etc.), milk, fresh vegetables, fish, meat, unbranded flour (atta, besan, maida), vegetable oil, sindoor, prasad, buttermilk, fresh fruits, contraceptives, eggs, natural honey, paneer, bread, bindi, stamp, judicial documents, printed books, bangles, and handloom products are exempt from GST.
- FMCG Products: FMCG products will get cheaper with a distinction made between daily toiletries and items of occasional use, categorizing them at the lower and higher bracket respectively.
- Food Items: Most food items have been conscientiously kept under 0% to 5% tax bracket to keep the inflation in check.
- Apparel and Footwear: For apparels the tax rates have cut down to 12% from the existing 18.16% while as for footwear the tax slab has become 18% for footwear above Rs. 500 and 5% for footwear below Rs. 500
- Branded Goods: The tax levied on branded goods has fallen down to 18% from the ongoing rates of 23%-24%, making it cheaper to shop for your favorite brands.
- Cab Fare: Taxi rides have become fractionally cheaper, as the tax rate has come down to 5% from 6% for cab bookings made online.
- Train/Airline Fare: Train fare remains largely unaffected as the tax has increased from 4.5% to a marginal increment of 5%. In the case of airlines, the economy class has a 5% tax, whereas business class has seen a hike to 12%.
- Jewelry: Investing in gold has become slightly expensive, with GST on gold going up to 3% and 5% on the fabricating charges.
- DTH/Entertainment Services: A unified tax of 18% will now be maintained on DTH services. For other entertainment avenues like Movie Tickets, tickets under Rs. 100 will see a tax of 18%, while tickets Rs.100 will see 28% tax levied.
- Miscellaneous Goods in the 28% Tax Slab: Luxury Goods, White Goods (Air-conditioners, dishwashers etc.), Tobacco and aerated drinks etc. fall in the 28% slab. Though there were earlier 178 items in this bracket, but with the new revisions per the 23rd GST Council meeting, there now remain only 50 items in this bracket.
Mentioned above, is a broad classification of the tax levied on most consumer goods under the new GST regime. You can tell us about how GST has affected your pockets and your thoughts about the tax regime, in the comments section below.