GST Cut: Big relief for common people. The government is monitoring 54 everyday items since the GST rate cut. Of these, 30 items have seen a larger-than-expected price reduction. The government is working with industry to address those items that have not yet seen a price reduction. According to government data, prices of 54 items have decreased since the new GST rates came into effect on September 22nd. However, for 24 items, the actual price reduction is less than the government’s initial estimates.
The government had asked the Central GST field offices to monitor the change in prices of 54 household items like butter, ghee, cheese, powder, soap after the revised rates came into effect. According to information received from 21 Central GST zones across the country, prices of 30 items, including air conditioners, televisions, tomato ketchup, cheese, and cement, declined more than expected.
However, prices of 24 items, including notebooks, chocolates, hair oil, toothpaste, pencils, thermometers, and bicycles, did not decline as expected based on the GST rate reduction. However, this estimate is based on the assumption that all other costs and benefits remained constant during this period.
GST has reduced so much
Under the GST reforms, starting September 22nd, the Goods and Services Tax (GST) will be implemented in two slabs, replacing the four slabs of 5 and 18 percent. A special rate of 40 percent has been set for luxury goods. Previously, GST was levied at rates of 5, 12, 18, and 28 percent. The reduction in GST rates has reduced the prices of 375 items, from toothpaste and shampoo to cars and television sets.
These things can be had and are cheap
According to government data monitoring GST rates on essential commodities before and after the GST rate cut, food items saw a larger-than-expected price reduction based on average prices reported by various sectors. These include dried fruits, cheese, condensed milk, jam, tomato ketchup, soy milk drinks, and 20-liter bottles of drinking water. GST on all these items was reduced from 12 percent to 5 percent effective September 22. However, there is scope for further price reduction in the case of butter.
These things became cheaper
According to government estimates, the expected reduction is between 6.25 and 11.02 percent, while the actual reduction was 6.47 percent. Finance Minister Nirmala Sitharaman said on Saturday that the benefits of GST rate cuts have been passed on to consumers through price reductions.
She said that we will work with companies to reduce the prices of items where the reduction is not as per the department’s estimates. Among food items, ghee, chocolate, biscuits and cookies, cornflakes, ice cream and cakes saw a smaller reduction in prices than expected.
Additionally, cosmetics such as shampoo, toothbrushes, talcum powder, and face powder saw a larger-than-expected price decline since September 22nd, while hair oil, toothpaste, shaving cream, and after-shave lotion saw a smaller decline. Similarly, prices of spectacles, contact lenses, geometry boxes, color boxes, erasers, AC machines, and TV sets, as well as table and kitchenware, saw a larger-than-expected decline. On the other hand, prices of notebooks, pencils, crayons, sharpeners, thermometers, and monitors declined less than the GST department had anticipated.