Modi government removed 12% and 28% GST slabs. Now 5% and 18% GST will be applicable. Prices of household goods and medicines will decrease.
Prime Minister Narendra Modi’s government has given a big relief to consumers by cutting GST rates. In the 56th meeting of the GST Council chaired by Finance Minister Nirmala Sitharaman on Wednesday, a historic decision was taken to abolish the 12% and 28% tax slabs. Now only 5% and 18% rates will be applicable. The new tax structure will be effective from September 22.
Everyday items will be cheaper
Sitharaman said that now only 5% GST will be levied on hair oil, soap, shampoo, toothbrush, toothpaste, bicycle, table wear, kitchen wear and many other household items. Earlier, 12% or 18% tax had to be paid on these.
Food items like namkeen, bhujia, pasta, noodles, chocolate, coffee, preserved meat, cornflakes, butter and ghee have also come under the 5% GST ambit.
No tax on milk, cheese and roti
The Finance Minister clarified that no GST will be levied on ultra high temperature milk, cheese, chenna and all types of Indian breads. That is, tax on breads ranging from ordinary roti to other breads will be completely abolished.
Relief on electronics and vehicles
The government has also given relief to the electronics and vehicle sector. Now 18% GST will be levied on AC, TV, washing machine, small cars and bikes up to 350 CC instead of 28%.
Benefit to farmers and handicrafts
GST on equipment used in farming and 12 special organic pesticides has been reduced to 5%. Similarly, 5% tax will now be levied on handicrafts, marble blocks, granite blocks and leather goods.
Big change in medicines and health services
There is also news of relief for patients across the country. GST on 33 life saving medicines has been completely reduced to 0%. Now there will be no tax on 3 special medicines for cancer and serious diseases. Tax on testing kits and other medical equipment has been reduced from 12% to 5%. GST on eyeglasses has been reduced from 28% to 5%.
Higher tax on luxury products
At the same time, the government has increased the tax on luxury products to 40%. This includes pan masala, cigarettes, gutka, cold drinks, juices, bikes above 350cc, mid and large cars, private helicopters, yachts and planes.