GST rate cuts bonanza! What is cheaper and dearer? Check full list of items in 0%, 5%, 18% & 40% slabs
Finance Minister Nirmala Sitharaman on Wednesday announced sweeping Goods and Services Tax (GST) rate cuts effective September 22. The GST revamp brings a majority of items in the 5% and 18% slabs, with several items now facing 0% or nil tax and some added to the 40% ‘sin tax’ slab.With GST cut on a lot of daily use household items, common man and middle class have big reason to cheer. So what has become cheaper after the rate cuts? Which items will face higher tax rates, and will now be dearer? Here’s the full list:
GST rate cuts and rationalisation: What is cheaper & what is dearer?
- Essential food items will remain tax-free, whilst various everyday food products and drinks including butter, ghee, dry nuts, condensed milk, sausages, meat, sugar confectionery, jam, jellies, tender coconut water, namkeen, 20-litre bottled drinking water, fruit pulp, juice, milk-based beverages, ice cream, pastries, biscuits, corn flakes, cereals and sugar sweets will see tax reduction to 5 per cent from 18 per cent.
- All varieties of chapati and paratha will become tax-free, reduced from the current 5 per cent rate.
- Household items including tooth powder, feeding bottles, tableware, kitchenware, umbrellas, utensils, bicycles, bamboo furniture and combs will have reduced tax from 12 per cent to 5 per cent. Personal care products such as shampoo, talcum powder, toothpaste, toothbrushes, face powder, soap and hair oil will now be taxed at 5 per cent instead of 18 per cent.
- Sitharaman announced that individual life and health insurance policies will become tax-free to encourage wider insurance adoption.
- The revised GST structure brings relief as cement prices will decrease due to tax reduction from 28 per cent to 18 per cent. Smaller vehicles, including petrol, LPG and CNG variants under 1,200 cc and 4,000 mm length, along with diesel vehicles up to 1,500 cc and 4,000 mm length, will also benefit from the reduced 18 per cent rate.
- Larger vehicles exceeding 1,200 cc for petrol and 1,500 cc for diesel shall incur a 40 pc tax, as announced by the finance minister.
- Consumer durables including air-conditioners, dishwashers, TVs and motorcycles up to 350 cc will now attract 18 per cent GST instead of the previous 28 per cent.
- A higher levy of 40 per cent shall apply to all automobiles above 1,200 cc and exceeding 4,000 mm length, motorcycles above 350 cc, personal yachts, aircrafts and racing cars.
- Electric vehicles shall retain the existing 5 per cent GST rate.
- Select luxury items, including premium automobiles, tobacco and cigarettes, shall attract a special 40 per cent tax slab. However, tobacco, gutkha and associated products shall continue with the existing 28 per cent tax plus compensation cess until the complete repayment of loans taken for state revenue loss compensation, Sitharaman clarified.
- The revised rates will take effect from September 22, coinciding with Navratri’s first day, except for gutkha, tobacco and related products, and cigarettes.
Also read | GST reforms: 0% GST on individual health and life insurance; reduced from 18%
