Courtesy the recommendations of the GST Council, chaired by Finance Minister Nirmala Sitharaman, your daily items may become cheaper, significantly reducing household expenses. The Goods and Services Tax (GST) Council on September 3 has slashed rates on everyday items from paneer, paratha, hair oil, soap, toothpaste, toothbrush, bicycle, kitchenware, among several other items.
Everyday items in focus
Food items like ultra-high temperature milk, paneer, pizza bread and khakra have been exempted, while the GST rate on plant-based milk drinks have been slashed to 5% from 18%. The GST rates of 12% on soya milk drinks have now been reduced to 5%. However, carbonated beverages of fruit drink or carbonated beverages with fruit juice will now cost you more.
Here are all your queries about why certain food items are taxed higher, while others have been exempted or taxed at a lower rate, answered by the government.
UHT (Ultra High Temperature) milk has been exempted. Does exemption to UHT milk also cover plant-based milk?
All dairy milk, other than UHT milk, were already exempt from GST. Hence UHT milk has been exempted to provide same tax treatment to similar goods. Plant based milk drinks except soya milk drinks attracted 18% GST while soya milk drink attracted 12% GST. The GST rate on plant-based milk drinks and soya milk drinks have now been reduced to 5%.
What is the reason for 40% rate on ‘other non-alcoholic beverages’?
The principle behind the recent rate rationalisation exercise is to keep similar goods at the same rate to avoid issues of misclassification and disputes. This has also been applied to ‘other non- alcoholic beverages’.
What is the GST rate on food preparations not elsewhere specified in any of the schedules?
Food preparations not elsewhere specified will attract a GST rate of 5%.
What is the reason for revising GST rate only on specified varieties of Indian bread?
Bread was already exempt while pizza bread, roti, porotta, paratha etc attracted different rates. All Indian breads, by whatever name called have been exempted even though only few goods have been mentioned by way of illustrative example.
Why has the rate of carbonated beverages of fruit drink or carbonated beverages with fruit juice been increased?
These goods attracted compensation cess in addition to GST. Since it has been decided to end compensation cess levy, the tax has been increased to maintain the pre rate rationalization level of tax.
Why is there a different tax treatment between paneer and other cheese?
Prior to rate rationalisation, paneer sold in other than pre-packaged and labelled form already attracted nil rate. Therefore the changes have been made only in respect of paneer supplied in pre-packaged and labelled form. Paneer is an Indian cottage cheese. This is mostly produced in small scale sector. The measure is intended to promote Indian cottage cheese.
What is the reason for differential tax treatment for natural honey and artificial honey?
This is intended to promote natural honey.
(Source: PIB)
