At its meeting held earlier this month, the GST Council approved tax cuts on nearly 200 items in the 28% tax rate slab.
The rate cut is applicable as of November 15, after the Centre and states issued notifications for the same. The Prime Minister is also positive about the benefits these changes will bring for the people, and says this will toughen the tax regime too.
Here is the list as per the Central Board of Excise and Customs (CBEC) notification, with a focus on the items related to the Food & Beverages (F&B) industry.
Changes of GST rates on goods:
From 28 % to 18 %:
- Chewing gum
- custard powder
- storage water heater
From 18% to 12%:
- Condensed milk
- Refined sugar and sugar cubes
- Curry paste, mayonnaise and salad dressings, mixed condiments and mixed seasoning
- Diabetic food
- Parts of specified agricultural, horticultural, forestry, harvesting or threshing machinery
From 18% to 5%:
- Puffed rice chikki, peanut chikki, sesame chikki, revdi, tilrevdi, khaza, kazuali, groundnut sweets gatta, kuliya
- Flour of potatoes put up in unit container bearing a brand name.
From 12% to 5%:
- Desiccated coconut
- Narrow woven fabric including cotton newar [with no refund of unutilised input tax credit]
- Idli, dosa batter
From 5% to nil:
- Guar meal
- Hop cone (other than grounded, powdered or in pellet form)
- Certain dried vegetables such as sweet potatoes, maniac iv. Unworked coconut shell
- Fish frozen or dried (not put up in unit container bearing a brand name)
- Khandsari sugar
Even though the tax rates have been slashed on all these food items and on the GST rate for restaurants (down to 5%), many eateries are still not passing on the benefits to their end customers.
Many restaurants are in fact raising menu prices, quoting the govt’s decision to withdraw credit for taxes paid on raw material and rent.
Moody’s said demonetisation and GST, along with other measures, will help reduce corruption, formalise economic activity, and improve tax collection and administration.
They see the Indian economy picking up speed, despite GST and demonetisation having destabilized growth over the near term. (ET news)