sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
Service Tax »
 12 ways to avoid paying more for bank services
 I-T return filing: Income Tax offices, Ayakar Seva Kendras to remain open from March 29-31
 Top 5 money matters you must settle before March 31 From income tax returns to LTCG,
 Steep fines for missing March 31 income tax deadline
 CBEC clears some air on refunds under GST, central excise, service tax laws
 3 key tax changes for senior citizens which will come into effect from April 1, 2018
 Income tax returns (ITR) filing: Not filed returns for 2 years? Beware! Deadline nearing
 All you want to know about HRA: When you can claim and how it is calculated?
 Income Tax Saving: 6 ways to save tax without investing before March 31 tax deadline
 Unnable to file your tax return? Take help of these portals
 Do you know which 80C instruments can help you save tax and carry no future tax liability?

70% of all goods and some consumer durables to become cheaper under proposed GST regime
April, 11th 2017

A number of goods such as cosmetics, shaving creams, shampoo, toothpaste, soap, plastics, paints and some consumer durables could become cheaper under the proposed goods and services tax (GST) regime as most items are likely to be subject to the rate of 18% rather than the higher one of 28%.

India is likely to rely on the effective tax rate currently applicable on a commodity to get a fix on the GST slab, said a government official, allowing most goods to make it to the lower bracket.

For instance, if an item comes within the 12% excise slab but the effective tax is 8% due to abatement, then the latter will be considered for GST fitment. Going by this formulation, about 70% of all goods could fall in the 18% bracket.

The GST Council has finalised a four-tier tax structure of 5%, 12%, 18% and 28% but has left room for the highest slab to be pegged at 40%. A committee of officials will work out the fitment and the council will take a final call at its next meeting on May 18-19. GST, India’s biggest tax reform in decades, is expected to be rolled out on July 1.

The government is keen to avoid price shocks following the switchover to GST and the fitment exercise will be guided by this principle. The GST legislation contains an anti-profiteering clause to ensure that industry passes on tax benefits to consumers by lowering prices where applicable.

GST seeks to replace central taxes including central excise, service tax and cesses along with state taxes including value-added tax, purchase tax and entertainment tax by a single levy, thus creating a unified national market. Moreover, industry will be eligible for seamless input tax credit that should also drive down prices as tax embedding through imposition of tax on tax inflates the final price of a product.

By slashing costs and boosting efficiency, GST will result in GDP growth getting a 1-2 percentage point lift, according to experts.

Final fitment should be based on effective tax rate to lower tax burden on consumers, they said.

"In most consumer products, excise duty is applied on MRP (maximum retail price) less abatement of 30-35%," said Pratik Jain, leader, indirect tax, PwC. "So, if MRP is 100, effective excise duty works out to 8-9%. When you add a standard VAT of around 13%, the effective rate works out to 21-22%. One would hope that most of these products, which include most FMCG (fast-moving consumer goods) and consumer durables, would be subjected to 18% GST and not 28%. If not, it would increase the tax burden on consumers and intended benefits of GST in terms of lower prices and increased manufacturing would be difficult to realise."

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Careers

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions