Finance Minister Nirmala Sitharaman announced major decisions after the 56th GST Council meeting, which will directly impact daily-use items. While the prices of some goods will fall, others will become more expensive.
New GST Slabs
Earlier, there were four slabs of 5%, 12%, 18% and 28%. Now, the 12% and 28% slabs have been abolished. Only 5% and 18% remain, while a new 40% slab has been introduced for luxury and “sin goods.”
What Are Sin Goods?
These are products harmful to health or society, such as tobacco, gutka, pan masala, alcohol, and high-sugar drinks. The government imposes higher taxes on these items to discourage their use, while the revenue is used for welfare schemes.
Also Read: New GST rates: What gets cheaper and costlier from Sep 22
Items Under the 40% Slab
- Vehicles: Petrol cars above 1200cc, diesel cars above 1500cc, bikes over 350cc, station wagons, racing cars.
- Luxury Transport: Private jets, helicopters, yachts, luxury boats.
- Weapons: Revolvers, pistols.
- Tobacco Products: Pan masala, gutka, bidi, cigarettes, raw tobacco leaves.
- Beverages: Fizzy sweet drinks, caffeinated drinks, fruit-based carbonated drinks, other non-alcoholic beverages.
- Online Gambling & Gaming.
Earlier, these items attracted 28% GST plus an additional cess, but now they fall directly under the 40% slab.
Relief for Consumers
Daily essentials like toothpaste, soap, shampoo, small cars, TVs, and ACs have been placed under the 5% or 18% slab, which means their prices will now come down.