India’s GST Council on Wednesday approved a simplified two-tier tax structure with rates of 5% and 18%, set to take effect from September 22. The decision was reached during the 56th meeting of the Council, addressing the issues of retail consumption, compensation cess and also the weakening exports due to global trade volatilities.
Here is a detailed look at the key changes in tax rates on essential, non-essential and luxury goods and services.
WHAT IS CHEAPER NOW
Daily essentials and personal care
Products like hair oil, shampoo, toothpaste, soap, toothbrushes, shaving cream, butter, ghee, paneer, and packaged snacks such as namkeen and mixtures will now be taxed at 5%, down from 12–18%.
Dairy, staples and packaged foods
UHT milk, paneer, roti, paratha, sweets, chocolates, coffee, sauces, biscuits, pasta, cereals, dried fruits, nuts, confectionery, refined sugar, syrups, and vegetable oils will also be taxed at 5%, a big cut from earlier rates.
Healthcare items
Thirty-three life-saving drugs, diagnostic kits, medical oxygen, thermometers, glucometers, and health and life insurance policies are now tax-free. Some essential medicines that earlier attracted 5–12% tax have also been moved to the nil category.
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