Jun 23 | 11:36 IST
GST Council Meet: Mobile bills, cigarettes to become expensive; cars, motorcycles may get cheaper
BT Online
Thursday, May 18, 2017 | 15:22 IST
GST Council Meet: Mobile bills, cigarettes to become expensive; cars, motorcycles may get cheaper

The two-day GST Council meet which will decide fitment of commodities in various tax slabs under the Goods and Services Tax has begun in Srinagar. The key GST Council meeting will see the states pitching for their preferred rates on select items.

Apart from Union Finance Minister Arun Jaitley, who is chairing the GST Council meet, finance ministers of 29 states and three union territories who will hold the final deliberations on the biggest tax reform since independence, the Goods and Services Tax (GST).

The GST Council had earlier agreed on a four-tier tax structure -- 5, 12, 18 and 28 per cent -- along with a cess on luxury and sin goods such as tobacco, pan masala and aerated drinks. The cess will be used to compensate the states for revenue loss arising out of the GST implementation in first five years.

The rates fixed during the meet will be charged from July 1, the scheduled date for rollout of GST which is also India's biggest tax overhaul since independence.

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Here's what could get cheaper and costlier after the implementation of GST in July:


  • The good news is 50 per cent of the essential food items like rice, wheat and medicines will be exempted from any tax under the new tax regime. Commonly used products like spices, tea and mustard oil will be taxed at 5 per cent.
  • While it is too early to say how gold and jewellery will be taxed under the GST, states like Kerala have asked for a 5 per cent tax on bullion. Kerala finance minister Thomas Isaac told reporters in Srinagar that the state wants jewellery to be taxed at 5% against 1.5% that the industry has been demanding. "Gold is a luxury product. It is not a necessity. Price of gold has quadrupled in the last one decade. Nobody had any problem. What is the big trouble with a 5 per cent tax on jewellery. We are very reasonable people (at the Council). We will discuss," said Isaac.
  • All luxury goods, aerated drinks and tobacco products are expected to be taxed at 28 per cent. However, with 12 or 18 per cent tax, services are expected to get more expensive. Mobile bills, insurance premiums, banking charges, internet, wifi and DTH services are likely to get costlier. GST may also make school fees, courier services and air tickets expensive.
  • Entry level cars, two-wheelers, paint, cement, electrical items, consumer durables are expected to get cheaper after GST rollout in July. With entertainment tax being subsumed in the GST, prices of movie tickets are expected to come down.


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