Chicken to tea: Many mass items to cost more

The Council discussed that GST rate should not be regressive in nature and be such that the existing revenues of the states and the Centre are protected and the impact on CPI inflation is minimal.

Written by Aanchal Magazine , Sandeep Singh | New Delhi | Updated: October 20, 2016 9:19 am
Gst, GSt rate, Gst meet, GST rollout, GST rate, GST rates, GST rate differences, GST cost difference, GST news, India news Centre said the total impact of the proposed rate structure on CPI-based inflation rate will be (-) 0.06 per cent.

With the Centre proposing a goods and services tax (GST) band that has a 6 per cent rate at the lower end and 26 per cent at the upper end, several essential items such as edible oils, gram products, other pulses products, chicken, tea and coffee will see taxation rising from the present combined tax incidence of 3-5 per cent to 6 per cent, if the proposals are accepted.

According to the presentation at the GST Council meeting Tuesday, of the 29 items (part of Consumer Price Index basket) that are proposed to be taxed at 6 per cent, 19 items are set to witness an increase in their tax incidence as currently they attract a lower combined tax rate. Within this group, however, the tax rate on items such as vanaspati, butter, ghee, taxi and auto-rickshaw fare and coffee powder is set to come down from the current combined tax incidence of 7-9 per cent to 6 per cent.

On the other hand, in case of CPI basket products that currently fall in tax rates of 25 per cent and above, most items will witness a drop in tax rates. As per the agenda papers which listed 50 items in this category (total CPI weight of 45.86 per cent), while the combined tax incidence for cold beverages (bottled and canned) currently stands at 38 per cent, it may come down to 26 per cent if the Council agrees to the proposal — these may, however, fall in the demerit goods category and attract additional cess.

productIf taxes on cars and jeeps are proposed to come down from 31 per cent to 26 per cent, that on motorcycles and scooters will come down from 28 per cent to 26 per cent. The Centre has, however, proposed to impose additional cess on high-end cars.

Other important items that have higher weightage in CPI and are likely to see a decline in prices are washing soap, soda and powder, toilet soap, hair oil, shampoo and hair cream, powder, lotion, perfume, toothpaste, toothbrush (aggregate weight of 2.71 per cent in CPI). Their tax rate will come down from the present combined tax incidence of 29 per cent to 26 per cent.

In its presentation at the Council meeting, the Centre said the total impact of the proposed rate structure on CPI-based inflation rate will be (-) 0.06 per cent. While the inflation impact on constituents of CPI such as health services, fuel and lighting and clothing is estimated to be 0.56 per cent, 0.05 per cent and 0.23 per cent, respectively, that for transport is estimated at (-) 0.65 per cent, education at (-) 0.08 per cent and housing at (-) 0.09 per cent.

The Council discussed that GST rate should not be regressive in nature and be such that the existing revenues of the states and the Centre are protected and the impact on CPI inflation is minimal. While it said that items being consumed by the upper middle class and rich should not be taxed at a rate lower than their present tax incidence, it said that items of mass consumption should not be taxed at a higher rate.

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  1. G
    gyan
    Oct 20, 2016 at 1:46 am
    what is shocking is that the BJP continues to release figures of 'falling inflation'. any middle cl household will tell you that vegetables have skyrocketed, and fruit is the preserve of the richer cles. At the same time, job creation, and the confidence of the people is at its lowest ebb.
    Reply
    1. J
      Jayakumar
      Oct 20, 2016 at 2:31 am
      You can't expect any reduction in price as the companies will increase their base price to maintain current price levels
      Reply
      1. B
        bitterhoney
        Oct 20, 2016 at 10:09 am
        Thank you Modi ji, good days have ushered for poor people. Prosperity is just a step ahead.
        Reply
        1. A
          ASHOK KUMAR
          Oct 20, 2016 at 8:53 am
          At last, Achey Din are here.
          Reply
          1. L
            Loveall
            Oct 20, 2016 at 2:33 am
            I m loving the ache din n best part is who ever will raise their voices against it will be labelled as anti national,,sikular,aaptard n what not ........democracy will die a slow death soon .......
            Reply
            1. L
              l s
              Oct 20, 2016 at 1:01 am
              My GOD. This F Minister is definitely anti-poor.lt;br/gt;The country is reeling with dengue and chickenguina, malaria etc, and he has the temerity to increase anti-mosquito items. Foolish and ir-resposible for a f min to act only for pro-rich. He increased ry/pension for govt employees without their asking. Did he forget the 90% poor of this country. Pleasing a few lakhs of govt employees, he feels he has taken care of all india's citizens. He does not realise that the poor are becomming poorer day by day, and the rich are becomming richer, not only in India, but in worlds rich people. BJP will have to pay a very heavy price for acting against poor people. All their policies are only for the rich. He has managed to decrease the interest of fixed deposit of senior citiizens, who depend on it to manage their families. Nothing has come down, every item is going away from the hands of the poor.
              Reply
              1. R
                Rishi Raj
                Oct 20, 2016 at 4:16 am
                The tax regime will lose whatever transparency it has under the GST regime. Moreover, the accountability will also go for a walk, with the FM throwing the blame and hiding behind a faceless council.
                Reply
                1. A
                  Ashok Mazumdar
                  Oct 20, 2016 at 1:19 am
                  Vegetarian ism of BJP, and Anti - tea lobby of Baba Ram Dev at work.lt;br/gt;lt;br/gt;Chickens are to be saved, like Gau Mata lt;br/gt;Tea to be replaced by Gau Mutra.lt;br/gt;lt;br/gt;Gau mutra and Gobar Paste may be introduced for Break Fast, as per RSS for Pregnant Women for healthy delivery of a child.
                  Reply
                  1. A
                    Ashok Mazumdar
                    Oct 20, 2016 at 2:18 am
                    Website of Fake Propaa of BJP's Chamchas. Fake Everywhere.
                    Reply
                    1. M
                      Manzoor
                      Oct 20, 2016 at 5:43 am
                      After every dark night, there's is a bright morning...
                      Reply
                      1. M
                        Manzoor
                        Oct 20, 2016 at 5:47 am
                        No rule/law is bad but our intention make them good or bad.
                        Reply
                        1. P
                          Parth Garg
                          Oct 20, 2016 at 4:49 am
                          Dream merchants are ruling the roost. Common man will be brought down to his knees. Let us enjoy Achhe Din in our disturbed sl
                          Reply
                          1. R
                            Restore Trust
                            Oct 20, 2016 at 1:31 am
                            All
                            Reply
                            1. R
                              Rais Akhtar
                              Oct 20, 2016 at 6:11 am
                              Ping of GST BILL must not burden the people both rich and poor.Now we realize it was better before the bill was cleared.The Government did not elaborate in the parliament that GST will see to it that there is no extra tax burden on the people.The objective of the GST was that Government will have just one regime of Tax. The original Bill never stited that people will have to pay more taxes. Government must see to it that that no extra tax is levied from the people.
                              Reply
                              1. R
                                rupendra singh
                                Oct 20, 2016 at 5:13 am
                                Not all the time govt is wrong. GST is one among those steps which shows it's brighter face. Now it is becoming reality.
                                Reply
                                1. S
                                  shassan
                                  Oct 20, 2016 at 12:13 pm
                                  Its Politics,, Keeping mind of peoples in Surgical strike, Some time to JandK, Some time in stani Actors,,,lt;br/gt;Normal Public need comfort life by getting daily consumables items in less efforts,,, But Gov always involves public in unwanted things,,,,
                                  Reply
                                  1. S
                                    SP
                                    Oct 20, 2016 at 8:20 am
                                    Generally taxing so called demerit goods excessively should be avoided. Rather we should strive for narrow band of taxation. For example taxing superior variant of Petrol much higher is a disincentive to use cleaner fuel. So also charging high for restaurants and hotel accommodation makes India unattractive. Even though alcohol and petroleum products are not in GST scope. We should move towards uniform and narrow taxation of all products.
                                    Reply
                                    1. T
                                      t d
                                      Oct 20, 2016 at 10:40 am
                                      Any type of tax is not going to help the common man or general public especially lower and middle income groups. The Business community pes this on to the consumers and consumers are bound to pay. Neither the Government nor the Business community have any concern for the poor and middle cl. It may be because the poor and middle cl consute about 80 to 85% of the potion.
                                      Reply
                                      1. I
                                        Indian
                                        Oct 20, 2016 at 8:58 am
                                        AAM INDIANS end up paying MORE TAX every time GOVT does anything with TAXES and this BJP GOVT is no exception. .......................... TAX REDUCED for CARS and SOFT DRINKS while INCREASED for AAM INDIANS necessities!!!!!!! .................. BJP GOVT will REDUCE TAX on BURGERS, PIZZAS, and FIVE STAR HOTEL STAY while INCREASING TAX on ATTA, RICE, SUGAR and DAL.
                                        Reply
                                        1. I
                                          Indian
                                          Oct 20, 2016 at 9:00 am
                                          OK ...... INCREASE TAX on ATTA, RICE, DAL and SUGAR and reduce TAX on FIVE STAR HOTEL STAY and FOOD. ....................... Happy????
                                          Reply
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