GST slabs can be reduced to three from five but will take time: Sushil Modi

Slabs under Goods and Services Tax (GST) can be reduced to three from five at present for the convenience of consumers and businesses though it will take some time, Bihar Deputy Chief Minister Sushil Kumar Modi.

Narendra Modi also heads high level minister panel on GST.

In an interview to PTI Bhasha, Modi said that there are five slabs in GST and "there is an intention to reduce it to three slabs but it will take some time" as it is related to states' revenue.

Reacting to questions raised by former finance minister P Chidambaram that why rates of 88 items were not reduced by GST council in 2017, Modi said: "This is not a decision where only BJP government is involved. The decision has been taken by GST Council in which congress led governments are also involved".

He said that after implementation of GST, initially it was to ensure that there should be no revenue loss and then rate on many items were gradually reduced with stabilisation of revenue

Tariffs, policy ambiguities blocking India's road to green future

Though still heavily dependent on coal-fired power, India is fast turning to cleaner sources of energy. Evidence: Solar installations in 2017-18 were double that of coal additions, which declined 28 per cent over the year.

But does this fast pace of growth mean the country can confidently meet its 175 GW of renewable energy capacity target by 2022 and even exceed it to reach 225 GW? Union minister of state for power and renewable energy RK Singh thinks so, though in his four-year achievement press conference, he stopped short of enunciating 225 GW as the new target. The 2022 ...Read Full Story

From Swiggy to Foodpanda, online food delivery service firms face GST heat

Online food delivery service companies like Swiggy are facing the heat from restaurants after the goods and services tax (GST) on eating outlets was cut to five per cent, from 18 per cent in November, and input tax credit provision was withdrawn.

Some restaurants have started charging higher prices on online food delivery platforms. Others are negotiating a commission cut with online food delivery partners to make up for the 3.5 per cent additional cost due to unavailability of the input tax credit (ITC) facility.

Swiggy, Zomato and Foodpanda provide online delivery services to restaurants at a commission of around 20 per cent, which is levied an 18 per cent GST. Unlike earlier, restaurants can no longer claim ITC on the 18 per cent GST for the input services from these delivery platforms. “These online food delivery companies have represented for a rate reduction or to allow ITC to restaurants. The matter is being discussed," said a government official.

Good show by Modi govt in four years; private sector now needs to pitch in

Evaluating the performance of any government on economic grounds is challenging. This is so because direct linkages are at best by chance as phenomena like oil prices, monsoons, global forces etc. affect inflation and exchange rates which are beyond the purview of any government. Further, it would also be disingenuous to say that the NPAs are high during a particular regime due to the ruling government as these things build up over time and mere recognition cannot be attributed to a government.

Hence, to evaluate the performance of the NDA government in the last 4 years a twofold approach is required. The first is to judge what is within the purview of the government and the progress made therein and the second is a comparison of economic indicators in the pre- and post-periods as part of the routine.

The performance of the NDA government in terms of conceptualisation and implementation of policies has been most remarkable with very little left to be done. The major reforms that were noteworthy are bringing in the eNAM (electronic national agricultural market), opening up of FDI (defence and railways equipment included), GST, power sector reforms, addressing NPA issue through the IBC and recap measures, improving the doing business environment, channeling funds for the SMEs etc.

Patanjali Ayurved hits GST roadblock: Sales growth may slow down in FY18

After growing at a breakneck pace for five years, Baba Ramdev’s Patanjali Ayurved has hit a major roadblock. During the financial year 2017-18, the group’s sales growth has slowed down considerably–- thanks to the massive transformational work following the implementation of the good and services tax (GST) regime in mid-2017.

According to Patanjali spokesperson S K Tijarawala, the initial glitches related to GST and the realignment work required due to its implementation cost Patanjali two months’ business in 2017. “We are in a growth mode and we have grown during the past year, contrary to the initial predictions that FMCG companies would face de-growth due to the implementation of GST. But, unlike other years, in 2017-18 we got only 10 months to do business. This might have a certain impact. The final revenue numbers are still being calculated. But, what we can confidently say now is that the 2017-18 revenue figure will not be less than what it was in 2016-17”, he told Business Standard.


In 2016-17, the Patanjali group had posted Rs 105.6 billion in revenues, of which Patanjali Ayurved – the flagship entity that markets most of its packaged consumer good products – contributed Rs 93.46 billion. Earlier, Baba Ramdev had set a target of doubling Patanjali’s sales during 2017-18 to over Rs 200 billion.

Cashback and discount: Modi govt's mega plan to boost digital transactions

The government is working on a proposal to incentivise digital transactions by providing cashbacks to businesses and price benefits to consumers, a source said.

As per the proposal being worked out by the Revenue Department, consumers paying through the digital mode would be offered a discount over the maximum retail price (MRP). The discount would be capped at Rs 100.

Businesses, on the other hand, could get a cashback based on the quantum of turnover through the digital mode.

The proposals to encourage digital transactions are likely to be placed before the GST Council, chaired by Finance Minister Arun Jaitley and comprising state ministers, on May 4.

According to the source, the issue of providing incentive for digital transaction was discussed at a meeting held in the Prime Minister's Office.

During the meeting, three possible modes of incentivising businesses to go in for digital transactions were discussed. Apart from cashbacks, a proposal to allow businesses to obtain tax credit on the basis of turnover obtained through digital mode was also discussed.

Moody's upgrade: CEA Arvind Subramanian hopes other agencies follow suit

Top government officials today hailed the rating upgrade by Moody's as "long overdue" and hoped others such as S&P and Fitch will follow suit as it presses ahead with steps to ratchet up growth.

The US-based Moody's today upgraded India's sovereign rating after 13 years to Baa2 with a stable outlook, from Baa3 earlier.

"It's a welcome development, but we also feel it was long overdue... it's a recognition of the actions that the government has undertaken like GST, bankruptcy. We also need to keep all these things in perspective," Chief Economic Adviser Arvind Subramanian said.

The government, he said, "is going to do what it has to do on the domestic front -- employment growth, economic growth, reviving investment," he told reporters here.

Asked if he expects other agencies like S&P and Fitch to upgrade, he said: "Let's hope they are not inconsistent amongst each other."

Subramanian had earlier observed that rating agencies follow inconsistent policies while rating India and China.

Economic Affairs Secretary Subhash Chandra Garg said the upgrade is definitely a big vindication of the structural and institutional reforms that India is doing.

"The fiscal deficit consolidation, debt control and all so everything which the government has done in the past couple of years have been recognised. They are projecting a little rise in the trajectory going forward, so they are conscious of the real dynamics of the debt situation. We, of course, remain committed to the fiscal path," Garg said.

Select hotel & restaurant shares gain on GST rate change

STOCK MARKET - Shares of hotels & restaurant companies rallied up to 16% on the BSE in intra-day trade in otherwise subdued market after the Goods and Services Tax (GST) Council decided to reduce the tax rate for all restaurants, barring those in luxury hotels, to 5%, without any input tax credit.

Restaurants in hotels with room tariff of Rs 7,500 and above per day will attract 18% GST with full input tax credit.

Among the individual stocks, Royal Orchid Hotels hit a 52-week high of Rs 156, up 16%, and Speciality Restaurants rallied 8% to Rs 127 on the BSE in intra-day trade.

Asian Hotels (West), Jindal Hotels, Advani Hotels, EIH Associate Hotels and Coffee Day Enterprises are among those trading 2% to 8% higher, as compared to 0.28% decline in the S&P BSE Sensex at 10:56 AM.

According to PTI report, the Hotel and Restaurant Association of Eastern India (HRAEI) said the GST Council's decision to cut tax rate for restaurants to 5% without input tax credit comes as a big relief for the industry.

"We are very happy with new GST slab announcement for restaurants. Our proposals were considered with due importance and this announcement is a big relief for the hospitality sector," HRAEI President Sudesh Poddar said in a release.

Titan Company hits record high after Q1 net profit nearly doubles

STOCK MARKET - Titan Company hit a record high of Rs 616, up 10% on BSE in early morning trade, after the company’s consolidated net profit in June quarter nearly doubled at Rs 238 crore, on back of healthy growth in jewellery business. Tata Group Company had profit of Rs 121 crore in the same quarter last fiscal.

The sales income during the quarter under review grew 42% to Rs 3,944 crore from 2,770 crore in the corresponding quarter of previous year.

“The jewellery division recorded an income growth of 54% in the first quarter to Rs 3,308 crore as against Rs 2,151 crore,” Titan Company said in a release.

The jewellery business has delivered a stellar performance due to combination of one of the best Akshaya Tritiya sales, a very successful gold exchange programme, as well as an element of advancement sales in June 2017 in anticipation of higher Goods & Service Tax (GST) rates, it added.

At 9:58 am; the stock was up 8% at Rs 604, as compared to 0.04% decline in the S&P BSE Sensex. The trading volumes on the counter more than doubled with a combined 8.31 million shares changed hands on BSE and NSE so far.

So far in the calendar year 2017, the stock zoomed 85% against 21% rise in the benchmark index.

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Cigarettes firms slip on cess hike speculations; ITC down 3%

STOCK MARKET NEWS - Shares of cigarettes companies such as ITC, Godfrey Phillips and VST Industries slipped up to nearly 3% on Monday following the news buzz that the GST Council may consider hiking the compensation cess on cigarettes if prices come down post the implementation of the Goods and Services Tax (GST).

The GST Council will meet later today to take stock of the implementation of the new indirect tax regime.  

Reacting to the buzz, ITC hit an intraday low of Rs 327, down 2.9% on the BSE in an otherwise strong market. The stock was the leading loser on Sensex.

Godfrey Phillips and VST Industries also slipped 1.8% and 1.3%, respectively on the BSE.

The government had recently notified that the cigarettes will be exempted of additional excise duty under the GST regime. The move triggered a sharp spurt in the stocks of cigarette firms with ITC crossing the Rs 4 lakh crore market capitalisation earlier in July. However, speculations are abuzz that instead of an additional excise duty, the government may increase the cess on the demerit good.

Under GST, cigarettes have been put under the highest tax slab of 28% along with an additional 5% cess and another cess based on varying length of the cigarettes.

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IT RETURN: Now, pay GST if you earn over Rs 20 lakh per year as rent

IT RETURN - Rental income from residential property has been exempt from GST but any earning over Rs 20 lakh annually from renting or leasing for commercial purposes would attract the levy.

Revenue Secretary Hasmukh Adhia said that if the house property is rent out for shop or office purpose, no Goods and Service Tax (GST) will be levied up to Rs 20 lakh.

"Rental income received from residential house is exempt. But if you have given your unit to commercial enterprise, then it is taxable if you are getting more than Rs 20 lakh as rent," Adhia said at the GST Master Class.

The taxpayer earning more than the exempted threshold will have to register with the GST Network and pay taxes.

GSTN Chief Executive Prakash Kumar said that as many as 69.32 lakh registered excise, service tax and VAT payers have migrated to the GSTN portal. There are over 80 lakh such assessees in the earlier indirect taxation regime.

Out of the 69.32 lakh, as many as 38.51 lakh have completed the entire registration process and registration certicate is being issued to them.

The remaining 30.8 lakh taxpayers are being sent SMS and emails by GSTN so that they complete the registration process by giving the details of the business like main place of business, additional place of business, promoters details.

Besides, over 4.5 lakh new assessees have registered on the GSTN portal since June 25.

Adhia further said that the facility to amend the details of businesses provided to the GSTN portal at the time of registration will open on July 17. Also, registration for GST practioners will open on the same day.

Besides, cancellation of registration can be done online.

GST readiness: EY launches helpdesk to ease transition for small firms

Tax consultancy firm EY has launched a GST helpdesk for small businesses wherein they can post their queries on the new indirect tax regime online.

EY GST Helpdesk is driven by a pool of indirect tax professionals powered by over 800 GST practitioners across 14 cities.

The facility would be available for free to small businesses, traders and entrepreneurs to achieve a seamless transition to GST and queries can be posted on EY India Tax Insights App, DigiGST website and EY_India on Twitter.

"This facility will help in enabling a smooth transition for smaller businesses and traders across the country," EY India Chairman Rajiv Memani said.

Businesses are in the midst of ensuring GST compliance and they have to align their software systems as per the GST requirement as well as adapt themselves to the new return filing and invoice generating format.

"We believe this helpdesk will be of great help to small entrepreneurs and help them realise the benefits of GST," EY India National Tax Leader Sudhir Kapadia said.

Goods and Services Tax (GST), rolled out from July 1, unifies 17 different taxes like excise, service tax and VAT and will transform India into a single market for seamless transfer of goods and services.

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GST could eat your 'free' lunch: Perks, gifts may be taxed under regime

MARKET NEWS - The Goods and Services Tax (GST) may have a lesser known impact on you — your free office luncheons, among other things, may no longer be exactly free, that is to say that they will attract tax. In fact, it could even lead to an increase in your income tax burden. 

Online human resource industry portal, peoplematters.in, reported in March that all free amenities provided to an employee outside his or her CTC, or cost to company (total salary given to an employee), would attract GST. 

Also, the report said that GST would be applicable if an employee uses the company’s assets for personal use. 

According to the report, given that CTC structures vary from firm to firm, services ranging from scholarships for an employee’ children to even pick-and-drop service will fall under the GST's ambit. 

It does not end there, the report added that input tax credit would not be available for facilities like life and health insurance provided to employees. In fact, club and fitness membership, cab facility, free or subsidised lunches, among other things, are some of the facilities a company will not be able to claim input tax credit on. Input tax credit will only be available for those services or amenities that a company has to provide to its employees under the law and as notified by the government. 

Here are the relevant sections:
SCHEDULE I [Section 7] Activities to be treated as supply even if made without consideration Supply of goods or services or both between related persons or between distinct persons as specified in section 25, when made in the course or furtherance of business:   Provided that gifts not exceeding fifty thousand rupees in value in a financial year by an employer to an employee shall not be treated as supply of goods or services or both

SCHEDULE II [Section 7] ACTIVITIES TO BE TREATED AS SUPPLY OF GOODS OR SUPPLY OF SERVICES 4. Transfer of business assets - Clause (b) - where, by or under the direction of a person carrying on a business, goods held or used for the purposes of the business are put to any private use or are used, or made available to any person for use, for any purpose other than a purpose of the business, whether or not for a consideration, the usage or making available of such goods is a supply of services;

GST impact: TV, fridge, AC, washing machine prices may rise twice this year

Prices of televisions, air-conditioners, washing machines and refrigerators may rise twice this year because of higher input costs and a new tax structure.

Videocon, Panasonic, LG and Whirlpool are considering immediate price hikes to pass on the additional tax burden under the goods and services tax (GST). The rise in material prices over the past few months may be passed on during the festive season.

Prices of steel, copper and plastic have been rising since February. Prices of components like compressors for ACs and refrigerators have risen up by 4 per cent and prices of TV panels have risen by by 3 per cent.

Under margin pressure, companies had postponed price hikes till the festive season. Rajeev Bhutani, vice-president, marketing, Samsung India Electronics, had told Business Standard earlier that the increased cost ofTV panels would have to be passed on.

"We have not yet decided the price hikes under theGST. We are also calculating the effect of higher prices of steel, copper and plastic. Hopefully, the increase will be spread over the coming months," said Kapil Agarwal, vice-president, Whirlpool of India.

Double Whammy

* Prices of key materials such as steel, copper and plastic have been rising since February

* TV-Panels got dearer by 3%, compressors for ACs & fridges by up to 4%

* Manufacturers reeling under margin pressure had to postpone price hikes to avoid impact on demand

* GST comes as second blow with up to 4% rise in effective taxation

* Companies can’t absorb additional costs, may have to hike prices again to pass on input costs ahead of festive season

MRP: Retailers can sell pre-GST goods with new price stickers till 30 Sep

MARKET NEWS - The government has allowed retailers with unsold pre-GST stocks to stick new prices on them for sales, taking into account the post-GST changes. This means that companies have time till 30 September to clear unsold pre-GST goods with a  revised MRP to be displayed along with printed sale price to reflect the changes post the new tax regime kicking- in.

The old MRP will have to be clearly on display along with the revised MRP sticker. But from 1 October, all pre-packed goods will have to have just one MRP including the GST.The old MRP will have to be necessarily displayed on the unsold inventories and the new rates can be reflected by way of stickers or through online printing alongside.

On items where the price has to be increased for unsold stocks, the manufacturer or packer or importer will have to give at least two advertisements in two or more newspapers informing people about the change.

MRP or Maximum Retail Price is the highest price that can be charged after including all taxes. But in case of some commodities, the tax rate has changed post Goods and Services Tax (GST), altering the MRP. This created a problem for several businesses which were left with large volumes of unsold pre-packed items when the GST came into force from 1 July.

The difference between the retail sale price originally printed on the package and the revised price “shall not, in any case, be higher than the extent of increase in tax” or in the case of imposition of fresh tax on account of the implementation of the GST, it said. “The original MRP shall continue to be displayed and the revised price shall not overwrite on it,” the notification said.

For reducing the MRP, a sticker of revised lower MRP (inclusive of all taxes) may be affixed and the same shall not cover the MRP declaration made by the manufacturer or the packer on the label of the package.

On-ground check: Is India Inc ready for GST?

MARKET NEWS - With barely a few hours to go before goods and services (GST) tax bill becomes a reality, channel / on-ground checks by two leading research houses – Bank of America Merrill Lynch (BofA-ML) and Edelweiss – suggest that India Inc, at least the small and medium enterprises, are not fully prepared for the transition.

Both, however, agree that beyond the short-term pain, there are gains in store over the long run. In the new regime, major Central and State taxes will get subsumed into GST, which will reduce the multiplicity of taxes.

“Our interactions with dealers, manufacturers and GST facilitators suggest that the SME segment is not only struggling for preparedness, but also staring at rising manpower and compliance costs which could disrupt their business and impact cash flows,” says a June 27 report by Edelweiss titled GST: Get, Set, Go.

In the run-up towards last leg of GST implementation, Edelweiss' interactions with companies and trade channels suggested four key points: a) there was significant slowdown in past two weeks of June across several sectors; b) inventory liquidation was wider-than-expected and could last beyond Q1FY18; c) most participants suggested normalisation only from Q3FY18; and d) FMCG, auto ancillaries after-market sales, pharmaceuticals, plywood and tiles sectors were most impacted, while auto OEMs and cement seem to be least impacted.

However, the brokerage argues that the GST will usher in a much simplified tax structure in the country, bring in cost efficiencies and result in market share shift from unorganised to organised players.

GST is a big positive, but I'm not investing in India yet: Jim Rogers

As global equitY MARKET NEWS continue on their journey north, JIM ROGERS, chairman of Rogers Holdings tells Puneet Wadhwa that he expects a correction going ahead. His decision of not to invest right now is not India specific, but has to do with the problems relating to how the major global economies are shaping up. Edited excerpts:

India has implemented the biggest tax reform in history - the goods and services tax (GST). What are your thoughts on the development?

With the implementation of GST, Prime Minister Modi has done what he said earlier. If GST can overhaul the tax system in India, it will be wonderful. This is the best thing to have happened to India by a politician since its independence, i.e. since the last 70 years.

What do you expect from the government in its remaining tenure? Do you see populist measures take centre stage with 2019 general elections in mind?

Well, Narendra Modi has done many populist things in the past. I think the last Union Budget had a number of populist measures as well. But, I don't know how populist will the GST will prove to be, as it is likely to disrupt a lot of people's lives. However, in the end, the measure will be good as it will overhaul the tax system in India. With the elections coming up in 2019, I am sure there will be other populist measures. Every politician in the world prepares for elections by giving away as much as he can.

What's your view on India now as an investment destination? Are you planning to invest here?

No, not yet. That's because I am not investing anywhere in the world right now. I am worried about the global financial markets and hence, I am in a wait-and-watch mode. If the United States (US), Japan or any other major market has problems, it will be a bad one. I am worried that the next time we have an economic slowdown, it's going to be very, very bad and will impact everyone. My decision of not to invest right now is not India specific, but has to do with the problems relating to how the major global economies are shaping up.

RBI expected to be less hawkish, may leave interest rates unchanged

MARKET NEWS- The Reserve Bank of India (RBI) will likely strike a less hawkish tone while leaving interest rates unchanged at a policy meeting on Wednesday, according to analysts, as inflation is running well below forecasts, and the economy has slowed more than expected.

A Reuters poll showed 56 of 60 analysts expected the RBI's monetary policy committee to keep its repo rate unchanged at a 6-1/2 year low of 6.25 per cent for the fourth meeting in a row. They also expected the reverse repo rate to be left at 6.00 per cent.

What analysts and investors are looking for this time is a less hawkish policy statement to reflect reduced fears of inflationary pressures.

Until a few weeks ago, bond market investors were on guard for possible future increases in interest rates after the RBI warned of "upside risks" to inflation at its last policy meeting in April.

"We don't expect any change in the official neutral stance in June but we do expect RBI to tone down its hawkishness compared to the April and February policy statements," said Siddhartha Sanyal, chief India economist at Barclays.

Investors have begun pricing in a softer tone from the RBI, with benchmark 10-year bond yields down about 35 basis points since hitting an over 7-month high on May 2. Some bolder investors are even betting on possible future rate cuts.

Consumer price inflation data for May will be released next week, but going by the April figures inflation is trending well below the RBI's target of 4.5 per cent in the six months to September, and 5.0 per cent for the six months through to March next year.

Notching its lowest annual rate in at least five years, consumer price inflation slowed to 2.99 per cent in April from 3.89 percent in March, just below the RBI's target of 4.0 per cent.

Meantime, the economy suffered a sharper setback than many economists had expected from the government's shock move last November to take high denomination currency bills out of circulation in a bid to curb tax avoidance.

Gross domestic product (GDP) grew 6.1 per cent in January-March, down from 7 per cent the previous quarter, to post it slowest growth rate in more than two years.

Investors' uncertainty over the RBI's stance was heightened by the release of minutes from the April meeting of the monetary policy committee which showed two of its six members had proposed rate hikes, before the committee ultimately voted 6-0 to leave rates unchanged.

GST on gold: Buying and making jewellery to get expensive for customers

The Goods and Service Tax (GST) Council has been kind enough to provide a special 3 per cent  GST to gems and jewellery sector ( the exception being rough diamonds at 0.25 per cent).

Going by the economic survey of India and the hype which was created in the run-up to this meeting, a much higher rate was feared. However, the rate of GST for jewellery is in line with what it was under the old tax regime.

GST has increased paperwork and lot of compliance. Only time will tell if we as a country or an industry are ready for it.

The immediate impact would be on the investment buying of gold by consumers as the resale value will be down by three per cent. Here' an example:

Mr A bought gold worth   Rs 100

Paid GST                                Rs     3
                                                —————
Total cost                                Rs 103

Now, after 6 months he wants to sell this gold and presuming that the gold price remains constant, he will get Rs 100 and the GST amount would be lost at the consumer level.

The transaction impact cost has increased from about one per cent to three per cent.

From the government's point of view, this is in line with their thinking/ planning — don’t invest in physical gold, rather invest in gold sovereign bonds. The consumer will also be better of as there is an interest coupon attached to bonds and it tracks local gold prices.

The exchange business of old jewellery for new ones will also be affected as the cost of 3 per cent will affect the transaction.

Another area which will affect the industry and the consumer is making of gold jewellery out of gold/scrap supplied by the customer. At present, there was no tax impact on the making of jewellery. Labour or making charges of jewellery were exempt from service tax (similar exemption was also under excise rules ). Under GST no such exemptions exist and making charges will be subject to 18 per cent GST.  This is an undesired result.

Export from domestic tariff area (other than SEZ ) will be hit on two counts:

One, there is no exemption from GST for gold procured for export purposes. This would mean a higher blockage of working capital.

Second, the export business will also be harmed. It depends on raw material (gold ) being supplied by oversea buyers and the Indian party makes the jewellery and exports i.e. value addition in the form of design and labour.

Under GST regime, the overseas customer will have to register as a non-resident business person and undertake the required paperwork. This will deter many customers.

Bullion imports system may be disturbed/altered as most international suppliers (including bullion banks)  sending goods on consignment to India will have to register as a non-resident business. This requirement may deter many players operating in India.

The diamond segment, particularly in the home state of Gujarat, had a total exemption from indirect tax. Value-added tax was zero in Gujarat and there is no excise on diamonds.
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Worried about GST rates? Know what gets cheaper and costlier from July 1

The Goods and Services Tax (GST) rehime is set to be rolled out from July 1, more than 11 years after a formal process to introduce it began. The GST Council on Thursday fixed rates for 1,211 items. In the second half of the Council meet, on Friday, rates of services and products like beedi, cigarettes, tobacco, footwear, gold, textile, handloom, handicraft, agricultural equipment and biscuits, will be discussed.

It appears from the first set of announced rates that consumers can rest assured most of the items will become cheaper (for now) as the new rates will be lower than the current effective levies.

Mobiles phones, however, might get costlier, with the government imposing a 12% GST, taking away the benefit under duty differential that was being offered to local manufacturers. So, under the new GST rate, while imported phones will become cheaper, most locally manufactured ones will get costlier.

Foodgrains will cost less as the GST Council decided to exempt the daily-use commodities from the levy.

GST promises to stitch together a common national market by replacing a string of central and local levies such as excise, value added tax, octroi, service tax.

What will get cheaper?

"Categorisation of several consumer products like soaps, toothpaste and hair oil under 18 per cent is good news and should see price drop for consumers," said Pratik Jain, leader, indirect tax, PwC to Economics Times. "Similarly, several food items such as edible oil, tea, coffee, sugar, etc, have been kept at 5 per cent , with exemption for milk and foodgrain, which would also cheer industry."

Branded goods: Tax rates on branded goods have been slashed to 18 per cent. Currently, the effective tax rate for the three items is pegged at 23-24 percent.

Hotels: Staying at hotels post the implementation of GST will become cheaper as they are currently taxed at 22% and a posed to be under the 18% tax bracket.

Restaurants which will come down to 18% from 22% tax slab.

Foodgrains will cost less

Processed food items that draw tax rates of 15% will be taxed at 5% under GST.

Under services, entertainment services will be brought down from 22% to 18% under GST.

Soap which are currently taxed at 28% will be taxed at 18% under GST. Similarly toothpaste will come down from 22-24% current tax rate to 18%.

Personal hair products - hair oil will become cheaper as it will drop 10% from 28% current tax rate to 18% under GST.

Entry level cars, two-wheelers, paint, cement, electrical items, consumer durables are expected to get cheaper.
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