GST Council approves 2-slab structure: What gets cheaper, what gets costlier | Details

THe GST Council on midweek sanctioned a john roy major modernize of the indirect assess regime, replacing the existing four-tier structure of 5, 12, 18, and 28 per cent with a simplified two-rate system of 5 and 18 per cent, while introducing a special 40 per cent slab for select items.The new rates will come into force from September 22, coinciding with the start of Navaratri.Also Read | Tax cut bonanza cleared in GST regime overhaulAfter a marathon 10.5-hour meeting of the 56th GST Council, Union finance minister Nirmala Sitharaman said all states unanimously backed the rationalisation, which is aimed at easing compliance, lowering costs, and directly benefitting consumers.Prime Minister Narendra Modi hailed the reform, saying it would improve the lives of citizens, particularly farmers, MSMEs, small traders, and the middle class while also giving a boost to the economy.What gets cheaperIndividual life and health insurance policies will now attract zero GST, down from 18 per cent.Ultra high temperature, paneer, paratha, roti, pizza bread, khakra and chena are exempt from GST. Butter, ghee, condensed milk, cheese, dry fruits, jams, jellies, confectionery, ice cream, pastry and biscuits, corn flakes, and cereals will now attract 5 per cent GST instead of 12–18 per cent.Fertiliser inputs like sulphuric acid, nitric acid, and ammonia, along with biopesticides and micronutrients, are down to 5 per cent from 12–18 per cent. Agricultural equipment, tractors, threshing, and soil-preparation machinery will also be taxed at 5 per cent.Small cars (petrol Everyday items like shampoo, toothpaste, toothbrushes, talcum powder, face powder, soaps, hair oil, tooth powder, feeding bottles, utensils, bicycles, umbrellas, and bamboo furniture have been brought down to 5 per cent.GST on cement has been cut to 18 per cent from 28 per cent, while auto components too are down to 18 per cent.Also Read | New GST rates: Congress, TMC welcome govt's ‘late’ revision; BJP praise decision What gets costlierSoft drinks, colas, fruit-based aerated drinks, and all carbonated beverages will now attract 40 per cent GST, up from 28 per cent.Energy drinks and other caffeinated beverages, too, will face 40 per cent GST.Cars with petrol engines above 1200cc or diesel engines above 1500cc and longer than 4,000 mm, along with motorcycles above 350cc, racing cars, yachts, and personal-use aircraft will attract 40 per cent GST.Aerated waters and flavoured beverages containing added sugar or sweeteners will now be taxed at 40 per cent.Pan masala, gutkha, cigarettes, chewing tobacco, and bidi will continue under 28 per cent GST plus compensation cess until dues are repaid, after which they will shift to the 40 per cent slab.(With PTI inputs)