Updated: June 30, 2017 7:15:21 pm
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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