GST rollout: Revenue Secretary Hasmukh Adhia says regime will bring transparency, benefit honest taxpayers

New Delhi: The landmark Goods and Services Tax will not alter the prices of essentials and daily use items like salt and soaps as they have either been exempt or tax on them has been kept at the current level. Unbranded food staples including vegetables, milk, eggs and flour will be exempt from GST along with health and education services. Tea, edible oils, sugar, textiles and baby formula will attract only 5 percent tax. These essential and daily use items make up for about 80 percent of the goods used. Luxury items including motorcycles, perfume and shampoo, which account for about 19 percent of all taxable items, will be taxed at 18 percent or higher. GST, the biggest tax reform since Independence, will unify 16 different central and state taxes like excise, service tax and VAT, to create a uniform rate of tax across the country from midnight on Friday. [caption id=“attachment_3491401” align=“alignleft” width=“380”] Representational image. Reuters[/caption] The tax department has been working overtime to inform people about GST, Revenue Secretary Hasmukh Adhia said, adding that the new regime “will bring in transparency, help cut tax evasion and benefit honest taxpayers”. Earlier, traders with turnover of above Rs 10 lakh were paying VAT at full rate, but they were exempt from excise. But now, a trader with turnover of Rs 20-75 lakh will have to pay 2.5 per cent tax. Businesses with turnover of Rs 20 lakh will be exempt. “For small businesses, we have composition scheme. It is very simple,” Adhia said. Under the composition scheme where the turnover does not exceed Rs 75 lakh, manufacturers will have to pay 1 per cent of turnover as GST, traders - 2.5 per cent and 0.5 per cent of turnover in state in case of other suppliers. Central Board of Excise and Customs (CBEC) in advertisements said single tax GST will bring down prices for most households. “GST a boon for households. 81 percent of items to fall below or in 18 percent GST slab,” it said. Butter, ghee, almonds, fruit juice, mobiles and umbrella have been placed in 12 percent tax bracket while 18 percent rate would be levied on hair oil, toothpaste, soap, ice cream, and printers. The highest tax of 28 percent will be levied on chewing gum, chocolates, custard powder and waffles containing chocolate. Besides, cars, aerated drinks, air conditioners, refrigerators and capital goods and all industrial intermediaries will attract the highest rate. The new tax regime, to be effective midnight on Friday, will replace the messy mix of more than a dozen state and central levies built up over seven decades, with a one national GST unifying the country’s $2 trillion economy with 1.3 billion people into a common market. GST will require businesses to file their returns online, for which the company providing the IT backbone GST Network has been working on the modalities. The returns are to be uploaded once a month by retailers following which the return form are to be matched for availing input credit and thereafter the computer will generate the tax liability. “Today income tax returns are also filed online, so nothing is impossible, it is easy,” Adhia said.