In its major push towards simplifying India’s indirect tax regime, the Union government is preparing to unveil sweeping reforms to the Goods and Services Tax (GST), potentially ushering in a two-slab structure and a 40% rate. The move, signalled by Prime Minister Narendra Modi in his Independence Day address, marks a pivotal shift in the country’s fiscal architecture.
Sources privy to the GST Council’s agenda have confirmed to CNBC-TV18 that a comprehensive report on rate rationalisation—already reviewed by the Group of Ministers—is slated for presentation at the Council’s upcoming meeting on September 3rd and 4th. The final decision rests with the GST Council, which will deliberate on these proposals in the coming meeting.
Here’s the list of items that likely will become cheaper and expensive:
What is likely to become CHEAPER (GST rate proposed to be reduced) with items moving to 5% GST (from 12%, 18%, or higher):
Agriculture and fertiliser
- Fertiliser acids and bio-pesticides (from 18%/12%)
- Micro-nutrients under fertiliser control order
- Sulphuric acid, nitric acid, ammonia
- Nozzle, drip irrigation system
- Harvesting, threshing machinery
- Tractors and tractor parts (tyres, engines, pumps, wheels, gearboxes, etc.)
Renewable energy
- Solar cookers, solar water heaters, energy devices and parts (from 12%)
Textiles and Handicrafts:
- Synthetic/artificial filament yarns, sewing threads, felt, gimped yarn, metalised yarn, rubber thread, carpets, gauze (from 12%)
- Handicraft idols, terracotta tableware, kitchenware, bags, pouches, purses, antiques (not exceeding 100 years)
Apparel and footwear
- Footwear priced below ₹2,500 (from 12%)
Education and stationery
- Erasers (from 5% to Nil)
- Maps, atlases, pencil sharpeners, pencils, crayons, exercise books (from 12% to Nil)
- Mathematical boxes, geometry boxes, colour boxes (from 12% to 5%)
Medical and health
- Over 30 cancer drugs (from 12% to Nil)
- Rare disease drugs (from 5% to Nil)
- All drugs and medicines from 12% to 5%
- Medical grade oxygen, iodine, potassium iodate (from 12% to 5%)
- Gauze, bandages (from 12% to 5%)
- Surgical rubber gloves, diagnostic kits (from 12% to 5%)
- Blood glucose monitoring systems, test strips (from 12% to 5%)
- Apparatus used for X-rays, spectacles including goggles (from 12% to 5%)
- Thermometers, medical, surgical, dental instruments & apparatus (from 18% to 5%)
- Apparatus used for surgeries, dental procedures (from 18% to 5%)
Food and beverages
- Butter, ghee, dairy spreads (from 12% to 5%)
- Dry nuts (from 12% to 5%)
- Condensed milk (from 12% to 5%)
- Sausages, meat (from 12% to 5%)
- Sugar boiled confectionery (from 12% to 5%)
- Jam, fruit jellies (from 12% to 5%)
- Tender coconut water (pre-packed) (from 12% to 5%)
- Namkeen, bhujia, mixtures (from 12% to 5%)
- Drinking water packed in 20-litre bottles (from 12% to 5%)
- Fruit pulp or fruit juice beverages (from 12% to 5%)
- Beverages containing milk (from 12% to 5%)
- Sugar confectionery other than mishri (from 18% to 5%)
- Cocoa butter, chocolates, other cocoa preparations (from 18% to 5%)
- Corn flakes, cereals (from 18% to 5%)
- Pastry, cakes, biscuits (from 18% to 5%)
- Ice cream (from 18% to 5%)
- Water (from 18% to 5%)
Consumer goods and miscellaneous
- Tooth powder, feeding bottles, tableware, kitchenware, umbrellas, utensils, sewing machines, bicycles, bamboo furniture, combs (from 12% to 5%)
- Talcum powder, face powder, hair oil, shampoo, toothpaste, dental floss, soap, toothbrushes (from 18% to 5%)
- Hand carts, rickshaws (from 12% to 5%)
- Live horses, marble blocks, granite blocks, natural menthol, X-ray films, plastic beads, glasses for spectacles, pots, jars, bells, gongs, contact lenses, frames for spectacles, sand lime bricks, stone inlay work, hand painting, handcrafted candles, statues, antiques under 100 years (from 12% to 5%)
- Defence sector: walkie-talkies, tanks, armoured fighting vehicles (from 12% to 5%)
Paper and packaging
Wood pulp, cartons, boxes, paperboards (from 12% to 5%)
What will become EXPENSIVE (GST rate increased or proposed to increase)
Items moving to 18% GST (from 12% or 28%)
- Man-made menthol (from 12%)
- Petroleum operations under petroleum exploration licenses or mining leases (from 12%)
- Coal bed methane operations (from 12%)
- Cement (from 28%)
- Fuel or lubricant pumps (from 28%)
- Ambulance vehicles, motor vehicles for transport of 10+ persons (from 28%)
- Petrol, LPG and CNG motor vehicles (engine ≤1200cc, length <4000mm) (from 28%)
- Diesel motor vehicles (up to 1500cc, ≤4000mm length) (from 28%)
- Three-wheeled vehicles (from 28%)
- Motorcycles up to 350cc (from 28%)
- Motor vehicle parts, seats, accessories (from 28%)
- Consumer electronics like ACs, dishwashers, TVs (from 28%)
- Apparel: readymade garments priced above Rs 2,500 (from 12%)
- Footwear priced above ₹2,500 (from 12%)
- Chemical wood pulp, uncoated paper and paperboards (from 12%)
Items moving to 40% GST (from 28%)
- Revolvers, pistols
- Smoking pipes
- Cigar or cigarette holders
- Station wagons, racing cars
- Motor vehicles above 1200cc and longer than 4000mm
- Aircraft, helicopters, aeroplanes for personal use
- Yachts and other vessels
- Motorcycles above 350cc
Items moving to Nil GST (more affordable)
- Erasers (from 5%)
- Ultra-high temperature milk (from 5%)
- Paneer, chena (pre-packaged and labelled) (from 5%)
- Pizza bread (from 5%)
- Khakhra, plain chapati, roti (from 5%)
- Paratha, parotta, other Indian breads (from 18%)
- Maps, atlases, pencil sharpeners, pencils, crayons (from 12%)
- Exercise books (from 12%)
Source from: https://www.cnbctv18.com/economy/gst-rate-slab-rejig-what-likely-will-become-cheaper-and-expensive-19660599.htm
