Cereals, hair oil & soaps to cost less from July 1 in GST; cess on cars

SRINAGAR: Foodgrains and common-use products like hair oil, soaps and toothpaste as also electricity will cost less from July 1 when the GST is scheduled to be rolled out as the all-powerful GST Council today finalised tax rates for bulk of the items. While the Council fitted all but six items in 5, 12, 18 or 28% tax brackets, cars will attract th

Small cars will be charged 1% cess on top of 28% tax, mid-sized and luxury cars will attract cess of  15% on top of the peak rate.

Aerated drinks too have been put in the 28% bracket along with a cess of 12%, but the rates for bidis along with gold, footwear, bidi, biscuits and agriculture equipments would be decided later.

While meat, fresh vegetables, honey, jaggery, prasadam, kumkum, bindi, pappad and contraceptives have been exempt from GST levy, items like pizza bread, sevaiya, condensed milk, frozen vegetables will attract 5% levy, as per the items list put on CBEC website late in night.

The Goods and Services Tax (GST) on coal has been brought down to 5% from the current tax incidence of 11.69%, thereby making electricity generation cheaper.

Common use products like hair oil, soaps and toothpaste will be charged with a single national sales tax or GST of 18 per cent instead of present 22-24% tax incidence through a combination of central and state government levies.

Milk and curd will continue to be exempt from taxation when the GST replaced current indirect taxes. 'Mithai' or sweets will attract 5% levy.

Daily-use items like sugar, tea, coffee (barring instant coffee) and edible oil will attract the lowest tax rate of 5%, almost the same as current incidence.

While frozen meat will attract a GST of 12%, Ayurvedic or homeopathy medicines, agarbatti, umbrella, electric vehicles and mobile phone manufacturing will be taxed at 12%.

Pastries and cakes, pasta, ice cream and soups, instant food mixes, betel nut, vinegar and sharbat will attract a 18% tax, while the highest tax of 28% will be levied on chewing gum, chocolates, custard powder and waffles containing chocolate.

Prices of foodgrains, especially wheat and rice, will come down as they will be exempt from the GST. Currently, some states levy Value Added Tax (VAT) on them.

Out of the 1,211 items, the GST rate for all but six was decided on the first day, he said."Rates have been finalised for the rest," he said, adding GST for packaged food items is to be finalised later.