GST Council's New Tax Revisions: Essentials Cheaper, Luxury Goods More Expensive
Overview of GST Changes
The GST Council's recent 56th meeting has led to a reduction in prices for various essential items, including groceries, medicines, and small vehicles. Conversely, certain luxury and non-essential products will see a significant price increase due to raised tax rates.
Items That Will See Price Reductions
Daily essentials such as UHT milk, paneer, parathas, pizza bread, khakra, and roti are now exempt from GST. Additionally, items like butter, ghee, cheese, jams, sauces, soups, pasta, namkeens, and confectionery will now incur a 5% GST, down from previous rates of 12-18%. Dry fruits, including almonds, pistachios, and cashews, along with citrus fruits, will also be taxed at 5%.
Healthcare: Critical medications like Aglasidase Beta, Onasemnogene, Daratumumab, and Alectinib will be tax-free. Most other medicines, medical devices, diagnostic kits, bandages, thermometers, and oxygen equipment will now be taxed at 5%, reduced from 12-18%.
Personal Care and Consumer Goods: Products such as hair oil, shampoos, toothpaste, soaps, shaving items, talcum powder, toothbrushes, candles, and safety matches will now attract only 5% GST. Stationery items, including notebooks, pencils, sharpeners, and erasers, along with toys, sports equipment, handicrafts, and bamboo or cane furniture, will also see price reductions.
Construction and Automobiles: The tax on cement has been lowered from 28% to 18%. Tractors, bicycles, motorcycles under 350cc, small cars (petrol/diesel <1200-1500cc, length <4m), electric and hybrid vehicles, and ambulances will benefit from reduced taxes. Additionally, marble, granite blocks, and eco-friendly building materials like particle boards made from crop residue will now be taxed at just 5%.
Items That Will Become More Expensive
Products such as pan masala, gutkha, chewing tobacco, and cigarettes will now be subject to a 40% GST, an increase from the previous 28%. Carbonated soft drinks, caffeinated beverages, and fruit-based fizzy drinks will also fall under this higher tax category.