In a bonanza to consumers, the revised GST rates on goods and services are set to come into effect from September 22, the first day of Navaratri.
Kitchen staples to electronics, medicines, and equipment, to automobiles, will get cheaper. Mass consumption items like ghee, paneer, butter, namkeen, ketchup, jam, dry fruits, coffee, and ice creams, and aspirational goods like TVs, ACs, and washing machines will also see the benefits of revised GST rates.
Various FMCG companies have already announced a reduction in prices in view of GST rationalisation.
The cost of medicines will come down for the common man, and home builders will also benefit
as the GST on cement has been cut to 18 per cent, from 28 per cent.
Branded as the “Next-Gen GST,” the new regime replaces the complex multi-slab structure with a simpler two-rate system and slashes taxes across essentials, automobiles, housing, healthcare, education, and services.
Essentials like Ultra-High-temperature (UHT) milk and breads are tax-free; soaps, shampoos, bicycles, packaged foods, and farm equipment have a GST drop of 5 per cent. Consumer durables, small cars, and construction materials move to the 18 per cent bracket, cutting costs in housing and automobiles.
The healthcare sector gains with tax-free life-saving drugs and exempt health insurance, while education items, handicrafts, and textiles see steep cuts. Budget hotels, gyms, salons, and yoga services now face just 5 per cent GST.
With a view to ensuring better compliance in passing on the benefits of the reduction in GST, the government has created a dedicated category on the National Consumer Helpline’s INGRAM portal for registering complaints related to revised GST rates and their redressal. Consumers can dial the toll-free number 1915 to report any issue.
The Consumer Affairs Department said that the helpline will also share “data and insights generated from consumer complaints” with companies concerned, the Central Board of Indirect Taxes & Customs (CBIC), and other authorities for timely action.
“This initiative is expected to strengthen GST compliance and promote a participatory governance model by empowering consumers to become active stakeholders in fair market practices,” it added.
Notably, the government has already directed pharmacies to revise their MRP or sell medicines at a lower rate after taking into account the GST cut benefits.
The biggest beneficiary of the GST rate cut is buyers of automobiles, wherein tax rates have been slashed to 18 per cent and 28 per cent for small and big cars, respectively.
In terms of the ITC (Input Tax Credit) on purchases made before the change in GST rates, the Centre has clarified that the users can claim full ITC as long as GST was charged correctly at that time. The later change in rates will not reduce the credit already available.
The government estimated a revenue impact of Rs 48,000 crore while the economists argue that the loss will be offset by stronger demand, a wider tax base, and improved compliance under the simplified two-slab structure.