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The government announced new GST rates on 3 September. This image is AI generated.
GST will be charged in only two slabs from tomorrow i.e. on September 22- 5% or 18%. The government has done this to make the tax system easier. This will also make common needs such as cheese, ghee and soap-shampoo AC, cars will also be cheap.
It was decided in the 56th meeting of the GST Council. Finance Minister Nirmala Sitharaman gave this information on 3 September. In response to 8 questions, every important information related to this change is being told …
Question 1: What has changed in GST rate?
answer: The government said on 3 September that the slab of 5%, 12%, 18% and 28% of GST has been reduced to two. Now there will be a slab of only 5% and 18%.
In addition, tobacco, paan masala, carbonated drinks and luxury items such as large cars, yatt and personal use will be charged a special tax of 40% on the aircraft.
There will be no tax on some items like chhena, cheese, roti, chapati, paratha. Except tobacco, new rates will be applicable on all goods from September 22.
Question 2: Changing tax slab will benefit or loss?
answer: This change will make it cheaper, food items, food items, electronic goods and cars will be cheaper. 18% tax on life and health insurance has also been reduced to 0. That is, there will be benefit. In addition to these stuff …
- The tax on cement ranged from 28% to 18%, this will reduce the cost of building or repair.
- Tax on goods like TV, AC has come down from 28% to 18%. This will make them cheap.
- There is no tax on 33 essential medicines, especially on medicines of cancer and serious diseases.
- Small cars and motorcycles up to 350cc will now be taxed at 18% instead of 28%.
- Tax on auto parts and three-wheelers also ranged from 28% to 18%, which will make them cheap.
Understand this with an example…
Before the change: Suppose, the price of a hair oil bottle was 100 rupees and if it looked 18% GST, then the calculation would be like this…
GST = ₹100 × 18% = ₹18
Total price = ₹ 100 + ₹ 18 = ₹ 118
After change: The new GST is 5%
GST = ₹100 × 5% = ₹5
Total price = ₹ 100 + ₹ 5 = ₹ 105
Benefit: The first bottle available for Rs 118 will now be available for Rs 105. That is, there will be an advantage of Rs 13.
Question 3: MRP will be more on old stock, will it also get cheaper?
answer: The government has said that even though the MRP is more on the old stock, these goods will also be available according to the new rate. Customers will have to pay the benefit of decreased GST rates.
At the same time, the National Pharmaceutical Pricing Authority (NPPA) has said in its orders of September 12 and 13 that-
- All companies making and selling medicines will have to update MRP of medicines, formulation and medical devices.
- After the GST change, revise price list dealer, retailer, state drug controller and government will have to be given to the customers.
Question 4: What to do if the shopkeeper does not give the benefit of GST deduction?
answer: If the shopkeeper does not benefit the price cut to the customers, then you can complain about it. Guilty shopkeepers may also be fined or jail sentence.
Question 5: Will life and health insurance premium be low?
answer: Yes, the government has reduced GST from 18% to zero on life and health insurance premiums. The renewal premium which will be filled after 22 September will not be charged GST. Understand how low the premium will be with an example.
Suppose there is a family health insurance policy with a premium of 50 thousand rupees:
Base Premium: 50,000
Premium with 18% GST: ₹59,000
Premium with 0% GST: 50,000
Benefit: 9,000 rupees
Note: These figures are only for example. The actual premium may be different.
Question 6: Will some goods be expensive by GST changes?
answer: Yes, a new slab of 40% has been made for things of hobby and luxury. It includes products like paan masala, tobacco.
Apart from these, some cars and bikes will also come under 40% tax. However, these vehicles will not be expensive. Earlier, they used to get up to 17% cess with 28% GST. That is, the total tax was 45%, which has come down to 40%.
- Petrol vehicles which are more than 1200 cc and more than 4 meters long will be taxed at 40%.
- Diesel vehicles which are more than 1500 cc and more than 4 meters long will also be taxed at 40%.
- The motorcycle that exceeds 350 cc will also come under this tax.
Question 7: Are there some goods whose prices will not change?
answer: Yes, about 90% of the goods have changed in GST 2.0, but there are some items whose GST rates have not changed.
- 0% slab- Fresh fruits, vegetables, milk, open flour, bread, bread, paratha. They were already zero rated and are still the same.
- 5% slab- Electric cars such as electric vehicles (EV). Earlier, there was 5% GST on them.
- 3% slab- Gold, silver, diamond and expensive stones. The first GST was 3%, still 3%. This is a special slab.
- 18% slab- Most electronics items that were already in 18% such as mobile phones, laptops and computers.
- Sin and luxury goods- Cigarettes, tobacco products (such as gutkha, bidi, paan masala) will still be on 28% + compensation cess until the compensation loan is cleared. Later will be shifted to 40%.
Question 7: Will hotel booking, flight tickets, cinema tickets also be cheap?
answer: GST has been reduced from 18% to 5% on hotel rooms booking, beauty and health services. At the same time, cinema tickets up to Rs 100 will have only 5% GST, which was 12% earlier. But more than 100 rupees tickets will be charged as before 18% GST.
- Hotel rooms, whose fare is less than Rs 1000, will still be tax free.
- GST has been reduced from 12% to 5% at the hotel room less than ₹ 1000 ₹ 7000.
- Premium hotels or whose fare is more than Rs 7500 will be charged 18% GST.
Suppose a hotel room is 5000 rupees. Earlier it used to be 12% GST. Now it will take 5%, so the calculation will be like this …
Before September 22 GST = ₹ 5000 × 12% = ₹ 600 Total Price = ₹ 5000 + ₹ 600 = ₹ 5600
After 22 September: GST = ₹ 5000 × % = ₹ 250 Total Price = ₹ 5000 + ₹ 250 = ₹ 5250
Savings: 350 rupees; The hotel room available for the first 5600 rupees will now be available for ₹ 5250.
At the same time, economy class will be cheaper and business class fare will be expensive in air travel. There will be no change in the first class. Economic class first used 12% GST. It has been reduced to 5%. Business class GST has been increased from 12% to 18%.
Question 8: What will be the impact on the economy with the new GST?
answer: The government claims that GST 2.0 will get relief to the common man, it will be easy to do business and the economy will get boost.
- At the ‘Next Jane GST Reforms’ program held in Visakhapatnam on 17 September, Finance Minister Nirmala Sitharaman said- this will bring about 2 lakh crore rupees in the economy.
- Chief Economic Advisor V Anantha Nageswaran said- People will have more shopping strength, which will lead to demand-production cycle. GDP growth will increase.
- EVP Garima Kapoor of Economist and Elara Capital said-these reforms will give a boost of 1% -1.2% to the consumption demand, which will increase GDP growth in the next 4-6 quarters.
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1. What will be cheaper, what will be expensive than GST change: bread, milk and health-life insurance tax free, see the full list of goods here
The GST Council has cut tax on household goods. In the meeting held on September 3, it was decided to remove the old rates of 12% and 28% of GST and two new rates of 5% and 18%. These rates will be applicable from September 22.
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