The proposed 4-tier GST structure may hit the common man as it is likely to result in higher taxes on various items including kitchen staples such as edible oils, spices and chicken.
The prices of certain consumer durables like televisions, air conditioners, fridges and washing machines may however become cheaper with decrease in taxes.
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.
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.
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.
TVs, air conditioners, washing machines, inverters, refrigerators, electric fans and cooking appliances may become cheaper with the incidence of taxes on them declining from 29 per cent to 26 per cent post implementation of the GST.
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.