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Sunday, July 14th, 2024

In the seven years of GST, the prices of daily use items have come down

Hair oil, toothpaste, soap, detergent and washing powder, wheat, rice, curd, lassi, buttermilk, wrist watches, TVs up to 32 inches, refrigerators, washing machines, mobile phones, are among the major items on which GST rates have been drastically cut or kept at zero for some, benefiting the people of this country.

A study by the Finance Ministry has shown that consumers have saved at least four percent of their household monthly expenditure after GST. Thus, consumers now spend less on daily consumption items like cereals, edible oil, sugar, sweets and snacks.

Below is the table containing the list of items on which GST rates have been reduced:

The table lists the items on which GST rates have been reduced:

The table lists the items on which GST rates have been reduced:

A landmark tax reform in the history of India, the Goods and Services Tax (GST), completed seven years on Monday. In the intervening period, several consumer-centric measures have been taken under this new tax regime.

The biggest tax reform GST was implemented on July 1, 2017, which removed the inefficiencies and complexities of the old tax system. Over the years, GST has, among other things, simplified compliance and reduced the cascading effect of the tax.

The government has gradually reduced the tax rates on essential and daily use goods.

Many decisions were taken in the GST Council with the consensus of the states and union territories, which benefited families in one way or the other. The GST Council has from time to time reduced taxes on major consumer goods of daily use, which has helped in household budgeting.

The GST Council, a federal body with the Union Finance Minister as its Chairperson and all State Finance Ministers as its members, has played its role in this forum.

Before 1 July 2017, the indirect tax system was quite fragmented. The Centre and the states used to levy taxes on different goods and services.

There were multiple taxes like excise duty, service tax, VAT, CST, purchase tax and entertainment tax, which was putting multiple layers of burden on the consumers.

GST also subsumed major taxes and many cesses. It brought uniformity in the tax structure across India, eliminating the cascading effect of taxes. GST consists of Central GST (CGST) and State GST (SGST), as well as Integrated GST (IGST) for inter-state transactions.

Under GST, businesses can claim credit for taxes paid on inputs, thereby avoiding double taxation.

In the earlier system, the rates, laws and procedures were very high. This made the compliance burden very high. There were tax gates at every inter-state border, which created bottlenecks in inter-state transportation of goods.

The choice of location of factories or warehouses by the industry was heavily influenced by the prevailing tax system rather than pure business considerations, making the industry uncompetitive.

In the year 2000, the then government had conceptualised GST and constituted a committee to prepare the GST model.

In the GST system, the key features mentioned above are that it ensured compliance simplification with uniform procedures across the country, a simplified registration process – single return – minimal physical interface, faster refunds, completely IT driven system, free flow of goods – check posts removed.

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