New Delhi, Sep 22 In a big relief for the middle class consumers, the Goods and Services Tax (GST) reforms came into effect on Monday, giving relaxation in prices of several essential and non-essential items, ranging from food, automobiles, healthcare, personal care and household and others.
Soap, toothpaste, shampoo, hair oil, tooth powder — the daily essentials of every household will now attract 5 per cent GST instead of 18 per cent, lowering the middle-class family budget. On a Rs 5,000 grocery and toiletries bill, savings could be Rs 500.
With the tax coming down to 5 per cent or NIL on food items, a middle-class family spending around Rs 8,000-Rs 10,000 per month on groceries and food items, will save around Rs 800-Rs 1,000 a month --over Rs 10,000 yearly.
Taxation on daily use products like paneer, roti, and packed parotta and other items is zero, while butter, ghee, cheese, chocolates, biscuits, and pickles are being brought in a 5 per cent slab, either from 18 or 12 per cent slabs.
The reduction in taxation on educational products can surely lower the burden on common citizens.
A school kit costing Rs 1,000 (notebooks, pencils, crayons) now costs Rs 850.
Additionally, GST on rare disease medicines, diagnostic kits, lab equipment, and medical supplies have been lowered to 5 per cent from 12 per cent.
The cancer drugs are now exempted from the GST, meaning a medicine costing Rs 10,000 per month will be cheaper by Rs 500-1,200.
A TV, which was earlier priced at Rs 40,000, will become Rs 4,000 cheaper. Similarly, solar heaters costing Rs 60,000 per unit become Rs 7,000 cheaper, and an air conditioner of Rs 35,000 will become Rs 3,500 cheaper.
The GST rationalisation also brings relief for farmers by reducing taxes on farming equipment. Artisans and entrepreneurs will benefit too.
As the new indirect tax structure -- 5 and 18, and 40 per cent -- is being implemented on the first day of the auspicious 9-day Navratri celebration, Prime Minister Narendra Modi termed the commencement of the taxation reforms as " GST Bachat Utsav".
"From tomorrow, you will be able to buy your favourite items with ease. This is like a GST saving festival for every Indian," the Prime Minister said while addressing the nation on the eve of the new tax structure set to kick in.
PM Modi said that the poor and the new middle class are getting double benefits after the GST rate cuts.
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