Introduction of Goods and Services Tax (GST) in 2017 has reduced the tax rates on common use items and has brought relief to the citizens, finance minister Nirmala Sitharaman said on Saturday highlighting the benefit of the landmark indirect tax reform.
Speaking at a function organised to mark the sixth anniversary of GST, Sitharaman said that on many common use items, the tax incidence under GST is much lower compared to that of the pre-GST regime.
"For example, items like pasteurised milk, tea, milk powder, sugar, edible vegetable oils, spices and footwear which are priced upto ₹500 whatever relevant unit it may be of, attract taxes of 5% under GST compared to earlier tax incidence of 6-10%," the minister said. So naturally, these items are taxed less, Sitharaman said.
"Again, the average pre-GST tax burden on items like hair oil, toothpaste, soap, perfume and detergent, was almost 28%. It was brought down to 18% under GST. These are tangible numbers," Sitharaman said.
The minister also pointed out that the average pre-GST taxation of common use electrical items such as mixtures, grinders, refrigerators, vacuum cleaners and television (27 inches) and washing machines were 31.5% and now they have come down to 12%. Sitharaman pointed out that these are no longer luxury items but are essential items for the middle class for better functioning of the household.
The minister also pointed out that state governments' revenue buoyancy too has improved after introduction of GST, even without taking into account Centre's transfers of compensation.
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