GST Helped Indians To Save Rs 3840 In A Year; Cement Can Be Removed From 28% GST Slab
GST was implemented last year in July, and debates are still on to find out its use-fullness.
In July last year, GST or Goods and Services Tax regime came into force, across India. There have been some debates over GST’s usefulness, and its impact on the Indian economy.
While some analysts support GST’s seamless and easy tax structure, there is a lobby which has been opposing GST since day 1 due to its complex nature.
Now, an unnamed official from Finance Ministry has revealed in hardcore numbers, how GST has benefitted the common man.
And if we believe the numbers, then GST has been pretty useful: A common Indian household has been able to save Rs 3840 or Rs 320 per month due to GST.
This Is How GST Enabled Savings Of Rs 3840 In A Year
As per an analysis of post-GST expenses in India, it has been revealed that due to GST, the common Indian has paid Rs 320 per month less, compared to pre-GST days.
This is how it works:
Say an average Indian household spent Rs 8400 on buying products such as cereals, edible oil, sugar, chocolates, namkeen and sweets, cosmetics and toiletries, washing powder, tiles, furniture and coir products and other household products, every month.
On this expense, in the pre-GST days, the household had been paying taxes of 830 as it includes state and central taxes, along with other duties including the dreaded VAT.
But after GST was implemented, the same tax on Rs 8400 came out to 510, which means a direct saving of Rs 320 per month. This translates into saving of Rs 3840 in a year.
The analysis tells us that after GST was implemented, taxes on around 80 household products such as spices, wheat, rice, nutrition drinks like Horlicks/Bournvita, pasta, idli dosa batter, mineral water, milk powder, curd, and buttermilk came down, which directly reflected in increased savings per month.
Which Items Became Cheaper?
Wheat and Rice, the most common grocery items in any household, was previously charged 2.5% to 2.7% tax, which has been removed under GST.
Sugar confectionery was taxed 21% under direct taxation, which has been reduced to 18% under GST.
Sugar and edible oil were taxed at 6% before, but now, under GST, only 5% tax is charged.
Direct taxation on Washing powder and tiles was 28%, which is now 18% under GST.
Namkeens and sweets were taxed at 12%, which has now come down to 5% GST.
Similarly, GST on furniture products too has been reduced under GST to 5/18%, down from12/28% earlier.
GST On Cement To Come Down?
Only Cement, and other 35 items are right now under the highest GST slab of 28%.
Very soon, cement will be removed from the list, and some other products as well.
An official said, “The idea is to keep only those items in the 28 per cent slab which are used for luxury purpose and demerit goods. The final call will be taken by the Council,”
Besides cement, the other products under 28% slab include automobile parts, tyres, automobile equipments, motor vehicles, yachts, aircrafts, aerated drinks, betting and demerit items like tobacco, cigarette and pan masala.
More than 150 items have been removed from the 28% GST slab in the last 1.5 years.
The decision shall be taken on December 22nd, when the GST Council meets for their next meeting.
We will keep you updated, as more details come in.
Related: GST Completes One Year – 5 Successes, 4 Failures & The Future Of Taxation In India!
