Goods and Services Tax or GST council has agreed on rate structure as ‘0%, 5%, 12%, 18% and 28%’. Having a slab rate structure in GST is a departure from the popular international practice of having ‘one rate of tax for all goods and services’. Council hasn’t announced agenda of goods and services under every slab rate. The FM has stated that highest tax slab rate would be applicable to items presently taxed at 30% to 31% (excise duty + VAT) would be taxed at a demerit rate of 28%.

1. How pocket-friendly will GST be for
you and us?
Goods and Services Tax or GST council has agreed on rate
structure as ‘0%, 5%, 12%, 18% and 28%’. Having a slab
rate structure in GST is a departure from the popular
international practice of having ‘one rate of tax for all goods
and services’. Council hasn’t announced agenda of goods and
services under every slab rate. The FM has stated that highest
tax slab rate would be applicable to items presently taxed at
30% to 31% (excise duty + VAT) would be taxed at a demerit
rate of 28%.
A few of the goods taxed at 28% would be charged with an
additional cess for a span of5 years. Impact of GST on MRP of products:
Product % rise/fall in price
Tea - Tata tea premium 1Kg -0.9
Jam - Kisan jam 700 gms -0.9
Footwear – Bata 0.2
Mobile - Micromax canavas 6 -4.4
Bottled water - Bisleri drinking water 1 ltr. 3.5
Bathing soap - Cinthol deo soap 125 gms 1.6
TV LED - Samsung 40" LED TV 2.3
AC (Split) - Onida 1.5 tons 3 star AC 2.3
Cornflakes - Kellogs Cornflakes 475 grams -5
Bicycle - Hero Sprint cycle 1.5
Pens – Uniball 2.1

2. Impact of GST on manufactured/imported consumer goods:
 Today, excise duty, CVD and CST aren’t available as set off against CST or VAT on
sale of goods. This cascading effect of tax isn’t likely to carry on in GST.
 Most of the goods would be taxed at nearest tax slab, after GST.
 Entry tax and duty levied on goods won’t be levied in GST.
 For goods which are categorized under ‘5%, 12% and 18%’ slab rates, effective tax
cost might be lesser against current tax regime.
 Goods where combined rate of excise duty and VAT is 30-31%, the effective rate
under the current regime is lesser than 28%. Therefore, subjecting these goods in GST
would increase the prices of goods.
Impact of GST on services:
 Cascading effect of VAT, CST, entry tax, duty and additional customs duty won’t exist
in GST.
 Most services are likely to be costlier because of increase in tax rate. But, impact may
not be as high as 3% (from current service tax of 15%) if the service providers pass on
savings on account of higher tax credits.
 All services will be taxed at a standard rate of 18%.
Industry welcomes new GST rates; Aam aadmi's grocery bill may not rise:
AAM AADMI KA BOJH: The aam aadmi’s grocery bill may not rise as the GST Council
decided to exempt food items or keep majority at the lowest rate of 5 per cent. More than
50 per cent of the items in the CPI - Consumer Price Index basket would be exempted

3. under the GST and the remaining placed in the lowest bracket. The exempted items will
not have the advantage of input tax credit.
Oil, soaps, shaving kits, small cars and other goods consumed by the middle-class, which
faces higher tax incidence of 30-31 per cent encompassing state and central taxes, could
become cheaper since they are to be placed in the lower tax slab of 18 per cent and not the
equivalent tax slab of 28 per cent.
Sports utility vehicles, pan masala and tobacco products, aerated drinks, are to witness any
change in their overall tax burden with a novel cess proposed on them. Tobacco currently
draws a total tax of about 65 per cent while for aerated drinks, the current rate is about 40
per cent. These goods will be taxed at the highest rate of 28 per cent and topped up with a
levy to raise the effective tax.
Related Articles:
GST Tax Structure- on screen and off screen impacts
ITC Relieved From the Hang-Over of GST Tax Structure

4. Disclaimer
The investment advice or guidance provided by way of recommendations, reports or other ways are solely the personal
views of the research team. Users are advised to use the data for the purpose of information and rely on their own
judgment while making investment decision.
Dynamic Equities Pvt. Ltd - SEBI Investment Advisory Reg. No.: INA300002022
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Article Written by
Salman Hashmi