New GST Rates to Take Effect from Navratri’s First Day; Cars and Other Goods to Become Cheaper

New GST rates will come into effect from the first day of Navratri. This will lead to lower prices for various goods, ranging from food items to vehicles. Milk, cheese, and bread will now be GST-exempt. Find out which other items will become cheaper…

New Goods and Services Tax (GST) rates are set to come into effect on 22 September, just before Navratri. This will lead to significant price reductions for a wide range of goods, from food and beverages to televisions, air conditioners, refrigerators, and vehicles, making them considerably more affordable. Under the new GST framework, the number of tax slabs will be reduced from four (5%, 12%, 18%, and 28%) to two – 5% and 18%. The government has also reduced the tax on several items to zero, which previously attracted 5%, 12%, or 18% tax. Luxury and sin goods will attract a 40% tax.

No GST on Milk, Paneer, and Bread

The GST rate on ultra-high temperature (UHT) milk, paneer, chhena (pre-packaged and labelled), pizza bread, khakhra, chapati or roti, paratha, kulcha, and other breads will be reduced to zero, down from the previous 5%. Additionally, the tax on medical-grade oxygen and stationery items (sharpeners, copies, notebooks, pencils, and other products) will also be reduced from 12% to zero. Personal health and life insurance, previously taxed at 18%, will also be zero-rated.

GST on ACs and Refrigerators Reduced to 18%

Furthermore, the government has reduced the GST on air conditioners and refrigerators from 28% to 18%. Taxes on vehicles have also been reduced. The GST on bikes with engine capacity of 350cc or less is now 18%, down from 28%. Petrol vehicles with engine capacity of 1200cc and length less than 4 metres, and diesel vehicles with engine capacity of 1500cc and length less than 4 metres, will now attract an 18% GST. Vehicles above these specifications will be taxed at 40%, down from approximately 50%.

Directive to Pass on GST Benefits to Consumers

The government has urged industries to pass on the GST reduction benefits to consumers. Almost all major companies in the automobile sector have announced price reductions to reflect the GST cut. Electronics companies like Voltas, Daikin, Godrej Appliances, Panasonic, and Haier have already reduced prices on air conditioners and televisions. Similarly, Amul and Mother Dairy have also announced that they will pass on the GST reduction benefits to consumers, reducing prices on products ranging from milk to ice cream and frozen food.

Source: IANS