The GST which will be rolled out will not alter the prices of essentials and daily use items. Items such as salt and soaps will not be affected price wise as they have been exempt or the tax remains at the current level.
Unbranded food staples including vegetables, milk, eggs and flour will be exempt from GST along with health and education services.
Tea, edible oils, sugar, textiles and baby formula will attract only 5 per cent tax.
Luxury items including motorcycles, perfume and shampoo, which account for about 19 per cent of all taxable items, will be taxed at 18 per cent or higher.
The tax department has been working overtime to inform people about GST, Revenue Secretary Hasmukh Adhia said, adding that the new regime “will bring in transparency, help cut tax evasion and benefit honest taxpayers”.
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.
Courtesy: OneIndia News
