GST rollout: 10 items that will become cheaper after July 1

The implementation of GST is expected to bring some much-needed relief to the common man's pocket, especially where essential goods are concerned.

 

With the rollout of the Goods and Services Tax (GST) all set for July 1, the country is in a rush to set up the infrastructural backbone for the biggest tax reform ever. This also includes tweaking of technology to bring as many as, 3.5 billion invoices within the GST Network by July 1. However, a smooth transfer and proper implementation would be highly beneficial to consumers, as prices of many essential products are all set to go down.

The Parliament cleared the way for the rollout of the new tax structure by passing four key bills in April. While the GST Council has finalised the rules regarding tax refund, registration, invoice debit and credit, the framework on input-tax credit, valuation, transitional provisions and composition will be determined at the next GST Council meeting scheduled for May 18.

The GSTN will provide the perfect technological skeletal system to support the unification and subsumption of various indirect taxes levied by the centre and the state, including the Value Added Tax (VAT), Customs and Excise duty and service tax among others, thereby creating a unified market across India.

The proposed sales tax will also serve to reduce the current costs of production and boost the manufacturing sector. It is expected that under the new GST regime, the cost of manufactured goods will come down, whereas the cost of services is expected to increase.

To ease further apprehensions regarding tax rates, Finance minister Arun Jaitley addressed the CII annual conference on Friday and promised not to spring any surprises in fixing of the tax rates under the GST regime. He however, asked companies to ensure that the benefits they receive because of the GST be passed on to the consumers.

"We are now in final stages of fixing tariffs for different commodities. The formula under which it is being done has also been explained and therefore nobody is going to be taken by surprise, it's not going to be very significantly different (from the present)," said Jaitley. The implementation of GST is expected to bring some much-needed relief to the common man's pocket, especially where essential goods are concerned.

10 essential products that will be cheaper after GST rollout:

Cars- With lower manufacturing costs, the prices of all types of cars are expected to drop significantly.

Batteries- The unified tax rated will bring the prices of batteries down significantly. The sector currently has to shell out 40-45 per cent in compounded taxes.

Movie ticket- Lowered rates of entertainment taxes will ensure that the costs of movie tickets will go down.

Cabs: Travelling via cabs or taxis is set to get cheaper, especially where inter-state travel is concerned.

Electronics items- Like fans, lighting, water heaters, air coolers, geysers etc. are expected to become cheaper after GST.

Mobile Phones- GST will remove the VAT applied on mobile phones making them cheaper more equally priced in all states.

Construction material- Construction materials such paint and cement are likely to turn cheaper. This will give a great boost to the construction industry.

Packaged food- Processed and packaged food items will get cheaper in the coming days.

Transportation- Transportation of goods from one state to another is expected to become quite simplified in the coming days. The abolition of VAT will make the process less costly.

Online Shopping- Shopping for a vast variety of products via online portals such as Flipkart and Amazon will become significantly cheaper.

Four rate categories of 5, 12, 18 and 28 per cents have been finalised by the GST Council. Fitment for all the goods and services will be done by adding the total incidence of current taxation, including central and state levies, and putting the goods and services in one of the above tax brackets that is closest to the total.