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Higher GST rate likely on oil, chicken; TV, ACs could get cheaper

The upcoming GST regime may see a higher levy on goods and commodities related to the common man likely to result in expanded assessments on kitchen staples, for example, eatable oils, flavors and chicken. According

India TV Business Desk, New Delhi [ Published on: October 20, 2016 16:54 IST ]
Higher GST rate likely on oil, chicken; TV, ACs could get cheaper

The upcoming GST regime may see a higher levy on goods and commodities related to the common man likely to result in expanded assessments on kitchen staples, for example, eatable oils, flavors and chicken.

According to the Centre’s estimates on impact of the 4-slab rate structure on CPI inflation, items like chicken and coconut oil which currently suffer a tax incidence of 4 per cent will be taxed at 6 per cent under the GST regime.

Under the proposed 4-slab structure, the items which are currently taxed between 3-9 per cent will fall in the 6 per cent bracket; those in 9-15 per cent range will come under 12 per cent rate.

Those products which are currently taxed between 15-21 per cent would attract 18 per cent levy, while those above 21 per cent would be taxed at the peak rate of 26 per cent.

Similarly, the tax burden on refined oil, mustard oil and groundnut oil will go up from 5 per cent to 6 per cent.

Other kitchen staples too will be taxed at 6 per cent as against 3 per cent in case of turmeric and jeera, 5 per cent in case of dhania, black pepper and oil seeds.

The prices of certain consumer durables like televisions, air conditioners, fridges and washing machines may however become cheaper with the incidence of taxes on them declining from 29 per cent to 26 per cent post implementation of the GST.

The government plans to roll out the new indirect tax regime, Goods and Services Tax (GST), from April 1, 2017. In its meeting with states this week, the Centre has proposed a four slab GST rate structure.

The lowest rate proposed is 6 per cent, with two standard rates of 12 and 18 per cent. The peak rate, which will mostly apply to FMCG and consumer durables, will be 26 per cent.

Besides, a cess is also likely to be levied on demerit or sin goods and polluting items.

Perfumes, shaving cream, powder, hair oil, shampoo, soap, and other toiletry items will become cheaper as they too presently are taxed at 29 per cent.

Gas stove, gas burner, mosquito repellent and insecticide may, however, become expensive as they are currently taxed at 25 per cent, lower than the proposed peak rate of 26 per cent under GST.

Saying that the four tier rate structure was designed in a way that neither the exchequer lose revenue nor does the common man’s tax liability increase significantly, Finance Minister Arun Jaitley had said: “the effort will be to fit the goods in the closest tax bracket under GST”.

The GST Council, which has Union Finance Minister and his state counterparts, will decide on tax rates next month.

(With inputs from PTI)

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