GST rollout: 80 per cent items within 18 per cent bracket; to benefit ‘honest taxpayer’, says Revenue Secy

GST rollout: Since they have either been exempt from the unified tax system or that the tax on them has been kept at the current level, prices of daily commodities will remain the same

By: Express Web Desk | New Delhi | Updated: June 30, 2017 7:15 pm
gst, gst rollout, gst launch, hasmukh adhia, what is gst, gst act, gst act 2017, central gst act, central gst act 2017 Among daily supply items, unbranded food staples including vegetables, milk, eggs and flour, and health and education services will be exempt from GST. (Representational Image)

With the country braced for the landmark Goods and Services Tax (GST) on Friday midnight, Revenue Secretary Hasmukh Adhia has said that the GST will not alter the prices of essentials and daily use items like salt and soaps, news agency PTI reported. Since they have either been exempt from the unified tax system or that the tax on them has been kept at the current level, prices of these commodities will remain the same.

Revenue Secretary Hasmukh Adhia said that the tax department had been working overtime to inform people about GST and added that it “will bring in transparency, help cut tax evasion and benefit honest taxpayers”.

From the total basket of goods used, essential and daily use items make up for about 80 per cent. Among other daily supply items, unbranded food staples including vegetables, milk, eggs and flour, and health and education services will also be exempt from GST.

Meanwhile, tea, edible oils, sugar, textiles and baby formula will attract only 5 per cent tax. Luxury items, which account for about 19 per cent of all taxable items, such as motorcycles, perfume and shampoo will be taxed at 18 per cent or higher.

The GST will unify 16 different central and state taxes like excise, service tax and VAT, to create a uniform rate of tax across the country.

Earlier, traders with turnover of above Rs 10 lakh were paying VAT at full rate, but they were exempt from excise. But now, a trader with turnover of Rs 20-75 lakh will have to pay 2.5 per cent tax. Businesses with turnover of Rs 20 lakh will be exempt.

“For small businesses, we have composition scheme. It is very simple,” Adhia said.

Under the composition scheme where the turnover does not exceed Rs 75 lakh, manufacturers will have to pay 1 per cent of turnover as GST, traders – 2.5 per cent and 0.5 per cent of turnover in state in case of other suppliers.

CBEC in advertisements said single tax GST will bring down prices for most household. “GST a boon for households. 81 per cent of items to fall below or in 18 per cent GST slab,” it said.

Butter, ghee, almonds, fruit juice, mobiles and umbrella have been placed in 12 per cent tax bracket while 18 per cent rate would be levied on hair oil, toothpaste, soap, ice cream, and printers.

The highest tax of 28 per cent will be levied on chewing gum, chocolates, custard powder and waffles containing chocolate. Besides, cars, aerated drinks, AC, refrigerators and capital goods and all industrial intermediaries will attract the highest rate.

The new tax regime, to be effective midnight tonight, will replaces the messy mix of more than a dozen state and central levies built up over seven decades, with a one national GST unifying the country’s USD 2 trillion economy with 1.3 billion people into a common market.

GST will require businesses to file their returns online, for which the company providing the IT backbone GST Network has been working on the modalities.

The returns are to be uploaded once a month by retailers following which the return form are to be matched for availing input credit and thereafter the computer will generate the tax liability.

“Today Income Tax returns are also filed online, so nothing is impossible, it is easy,” Adhia said.

(With inputs from PTI)

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  1. M
    Md Ibrar
    Jul 1, 2017 at 10:04 pm
    I can say good step
    Reply
    1. C
      christian coleman
      Jun 30, 2017 at 10:30 pm
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      Reply
      1. N
        Nadeem Ansari
        Jun 30, 2017 at 10:06 pm
        They ignored ecommerce sellers, where they are under GST even with under 20 lakh annual turnover
        Reply
        1. R
          Ramanan Venkataraman
          Jun 30, 2017 at 9:39 pm
          Fine, why the god delay to announce the split of gst rates into sgst and cgst rates.
          Reply
          1. T
            Thomas George
            Jun 30, 2017 at 9:26 pm
            Many comments here seem to ignore the fact that GST combines excise and VAT. Therefore, an 18 VAT is less than 14 VAT excise. There are many things that one can find wrong with GST -- primarily loss of ability for States to set their own rates -- but, this is not one of the problems considering that the FM has said that based on tax revenue, he may work to reduce rates.
            Reply
            1. K
              Krishnan
              Jun 30, 2017 at 8:57 pm
              GST rate of 12 on fertilizers reduced to 5 just now. IE is silent
              Reply
              1. G
                Gangu Radhakishan
                Jun 30, 2017 at 8:03 pm
                All parties should co-operate to implement GST for the benefit of the nation. No more diluting politics which will stop the development thereby India may remain a developing nation for ever. Everything should be moving on the foundation of sacred Vedic life style or highest ethics of the land. Appreciations to all state and central governments.
                Reply
                1. S
                  Subhash
                  Jun 30, 2017 at 8:19 pm
                  "80 per cent items within 18 per cent bracket". Is this the number of the items or the total tax collections? When all financial transactions are going to increase from 15 percent (14 percent under UPA) to 18 percent it is going to affect even the items which have been Taxed low. There is going to be an increase in Tax revenue by as much as 2 . From whom is it going to come? The common person after all.
                  Reply
                  1. V
                    Vivek
                    Jun 30, 2017 at 8:34 pm
                    Excellent comment. I agree with your view.
                    Reply
                  2. V
                    Vinay Verma
                    Jun 30, 2017 at 7:49 pm
                    Strange ... Just to reward the honest tax payers ..... Wat a move .... And for the same honest tax payers service tax has been raised from 15 to 18.....
                    Reply
                    1. H
                      Henri
                      Jun 30, 2017 at 9:00 pm
                      Total tax of 22 per cent etc. on many consumer items reduced to18 p cent now. In the long run this will simplify and arrest tax evasion.
                      Reply
                      1. S
                        Subhash
                        Jun 30, 2017 at 9:29 pm
                        What simplicity? Instead of 2 returns per year the businesses will have to submit 49 Tax returns and that too real time and online which requires computers, computer literacy and internet.
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