GST RATES – MIDDLE CLASS CAUGHT IN THE MIDDLE AGAIN!

By Ruma Dubey

For once we all will remember Srinagar for more than just terror attacks and insurgency. It will be marked as the place where the most crucial aspect of the GST – the rates were brainstormed and finally fixed.

Yes, yesterday, India moved a step closer to the July 1^st deadline by fixing rates on 1150 items of the total 1211 in the GST basket.

The rates have kept the essentials under exemption or 5% bracket but for the middle class, especially the urban masses, costs are sure to go up on various items.

• Here is a quick look at the new rates under which most of the day-to-day household items will become cheaper.
• There are five rates – 28%, 18%, 12%, 5% and exemption, with additional levy or cess on demerit goods, which will typically come under the highest tax bracket of 28%.
• Of the total goods, 19% will come under the 28%; 43% will come under 18% bracket; 17% will come under 12%; 14% under the 5% tax rate and 7% will be exempted.
• States will get compensated for the gap which will come on account of abolition of VAT and octroi. This compensation will be raised via 'GST Compensation Cess', which essentially means cess of luxury items and sin goods.
• Rates for gold, beedi, biscuits, cigarette, agricultural implements, footwear, textiles and biodiesel, plus tax on services will be decided on today. Also to be decided are branded cereals, packaged food including packaged fruit juices.

Some day-to-day items in the five brackets: (this is not a complete list but an overview)

Exempt

Cereals (unpacked and unbranded), milk, paneer, curds, lassi, buttermilk, unbranded and unpacked honey, fresh vegetables, fruits and jaggery , atta, maida, all goods of seed variety like groundnut, soya, linseed, sunflower, mustard etc,  betel leaves,  puffed rice, papad, bread, prasadam given in places of worship, toddy and neera, tender coconut water, human blood required for transfusion, contraceptives, printed books, newspapers, earthen pots.

5%

Sugar, tea, coffee, sweets, edible oil, coal, cinnamon, nutmeg, cloves, LPG, kerosene, handmade safety matches, newsprint, building bricks, roofing tiles, renewable energy devices, spacecraft, life savings drugs.  

12%

Dry fruits, ghee, butter, cheese, all meat packed in frozen form, toothpowder, agarbattis,  feeding bottles, umbrellas, walking sticks, geometry boxes, steel utensils,  telephones, combs, hairpins, pencils, crayons.

18%

Most of the FMCG goods - hair oil, toothpaste and soaps, margarine, refined sugar,  jams, jellies, milkmaid, sauces, ice-cream, instant food mixes, supari, sharbats, bottled and packaged water, ink, insecticides, disinfectants, children’s coloring drawing/books, pig iron, ferro alloys, steel tubes/pipes,/sheets, aluminium alloys/ingots, padlocks and locks with keys, optical fibres, military weapons other than revolvers and guns, will fall in the 18% category and so will all capital goods and industrial intermediates.

28%

Cars will come under the 28% tax bracket and over and above this, small petrol cars will attract a cess of 1%, small diesel cars of 3%, luxury cars of 15% and 350 cc bikes of 3%. Even aerated beverages will be levied 28% tax.

Other items include in this category are private jets, yatchs, tobacco, pan masala, aerated drinks, lemonade, molasses, chewing gum, white chocolate, protein concentrates, paint and varnishes, paints used by artists, beauty and make-up preparations, perfumes, pneumatic  and retreaded tyres of rubber, suitcases, handbags, wood used for making furniture, wall paper, artificial flowers, wigs, razors, aluminium foils, goggles wrist watches, musical instruments, lamps and light fittings, video games, flasks, ACs and refrigerators.