GST implementation enabled increased Household Savings as tax rates came down

As per finance ministry reports, the implementation of Good and Services Tax (GST) has brought down the tax rates and enabled increased Household Savings for the customers. According to the analysis, an average consumer is now saving about Rs 320 monthly on the purchase of commonly used goods including cereals, edible oil and cosmetics post-GST implementation on an expenditure of Rs 8400.

According to the analysis, If a household spends Rs 8,400 a month post GST on 10 goods — cereals, edible oil, sugar, chocolates, namkeen and sweets, cosmetics and toiletries, washing powder, tiles, furniture and coir products and other household products — its monthly savings would be close to Rs 320, the finance ministry source claimed referring to the expenditure analysis. An analysis of the pre and post-GST implementation shows that the tax rates have come down on at least 83 consumer products such as hair oil, toothpaste, soap, washing powder and footwear.

Earlier, before GST, when a consumer spent Rs 8,400 on the daily use items, he/she had to pay Rs 830 taxes but after GST the tax charges have been reduced to Rs 510. The consumer saves effectively Rs 320 on consumption of daily needs goods worth Rs 8,400, as per finance ministry source. In the earlier tax framework, the central government would levy excise duty on a product manufactured in a factory and subsequently the state governments would impose VAT on top of this. This meant that the consumer not only paid VAT on the price of the product but also on the excise duty charged by the centre.

- Advertisement - - Article resumes -

Implementation of GST resulted in uniform tax rates on goods and services and it also removed the tax-on-tax widespread in the previous system. In addition to this, lowered GST rates on a host of products have facilitated increased monthly savings for consumers. According to the government source, wheat and rice have been exempted from tax under GST against 2.5/2.7% tax incidence in the previous framework. Likewise, tax on milk powder is reduced by 1% from 6% to 5% post-GST. Sugar confectionery products were taxed at 21% in earlier tax regime but under GST they have been put under the tax slab of 18%.

The source asserted that there has been a marked reduction in tax rates on scores of goods including milk powder, curd, buttermilk, spices, wheat, rice, nutrition drinks like Horlicks/Bournvita, pasta, idli dosa batter and mineral water, as these products are taxed at a much lesser rate under the GST than previously. The tax rate on washing powder and tiles has come down to 18% from 28% earlier. On furniture goods, the earlier tax rate of 28% has been brought down to 5/18% slabs under GST.


Share and Support:
Support OpIndia by paying for content

Most read articles recently

Twitter locks account of True Indology as it exposed NDTV’s distorted claims of communal harmony in Jammu and Kashmir

Questioning the so-called Hindu-Muslim harmony in the state of Jammu and Kashmir, True Indology said that one-dimensional harmony of Hindus towards Muslims meant ethnic cleansing.

Mamata Banerjee govt’s reason to block Amit Shah’s chopper landing don’t hold up, Airport not under construction: Report

The TMC supremo Mamata Banerjee led West Bengal government has denied permission for BJP President Amit Shah's chopper to land in the Malda Airport
Exclusive: Read full details of criminal defamation filed by Vivek Doval against Caravan Magazine and Congress leader Jairam Ramesh

Read full details of the criminal defamation case filed by Ajit Doval’s son, Vivek Doval against Congress’ Jairam Ramesh and Caravan Magazine

Read exclusive details of the criminal defamation case filed by Vivek Doval, son of Ajit Doval against Caravan Magazine and Congress leader Jairam Ramesh

AAP IT cell faces humiliation over their old tweets as Kejriwal joins hands with Sharad Pawar

After the infamous 'Lalu-hug', Kejriwal was found hobnobbing with NCP's Sharad Pawar, whom Kejriwal has accused of hoarding black money

Media spreads half-truths about central government debt under Modi

On January 19th 2018, several media houses reported how the central government debt had increased massively under the Modi government

Vivek Doval files criminal defamation case against Congress leader Jairam Ramesh, Caravan Magazine editor and reporter

Vivek Doval, son of NSA Ajit Doval has filed a criminal defamation complaint against Congress leader Jairam Ramesh, Editor-in-Chief of Caravan Magazine and Caravan Magazine reporter Kaushal Sharoff

NSUI leader suspended, FIR lodged after video of him threatening girl student goes viral

The National Students' Union of India (NSUI) is the student wing of the Indian National Congress.

Central Government ready to prosecute former Home Minister P Chidambaram in Ishrat Jahan affidavit case: Reports

Government to prosecute former Home Minister P Chidambaram, in relation to Ishrat Kajan affidavit change case.

Chennai’s Loyola College displays Hinduphobic ‘artworks’, apologises after backlash

The art that was put on display in an exhibition in Loyola College expressed anti-Hindu sentiments. It depicted Hindu symbols and Bharat Mata in a derogatory manner.

Fact-Check: N Ram is lying in his The Hindu article about the Rafale Deal, here’s how

The Hindu article gets its facts wrong and makes a blunder in analysing them

Latest articles

Connect with us

128,661FansLike
104,827FollowersFollow
9,850SubscribersSubscribe

Don't miss these