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
    2. 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
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