GST next-gen reforms effective Monday will reduce household grocery bills by 13% and save small car buyers ~ ₹70,000.
375 items including groceries, agri-equipment, medicines, and automobiles became cheaper.
Tractor buyers (up to 1800 cc) save ₹40,000, bikes/scooters (up to 350 cc) save ₹8,000, TVs (above 32 inches) save ₹3,500 and ACs save ₹2,800.
The GST next-gen reforms, which kicked in from Monday, will lead to a saving of 13% in the household bills for groceries and daily essentials, while a small car buyer could save around ₹70,000.
According to government estimates, stationery, clothing, footwear and medicines purchases would bring in savings in the range of 7-12%, while the savings would go up to 18% in the case of individual health and life insurance policies, which have been exempt from GST effective Monday.
As many as 375 items, including groceries, agri-equipments, clothing, medicines and automobiles, got cheaper as the GST 'next-Gen' reform kicked in from Monday. Prime Minister Narendra Modi has termed the reform as 'GST Bachat Utsav'.
The government has estimated that there would be a savings of ₹40,000 on the purchase of tractors up to 1800 cc. GST rate has been cut to 5% on tractors from the earlier 12-18%.
In case of bikes/scooters (up to 350 cc) purchase, savings would be ₹8,000, while in TV (above 32 inches), there would be savings of ₹3,500. Air Conditioner purchase would result in a saving of ₹2,800 as the GST rate of these items has been slashed from 28% to 18%.
Modi, in his address to the nation on Sunday, had said "GST Bachat Utsav (savings festival)", coupled with the hike in income tax exemption to ₹12 lakh given in the Budget, will be a "double bonanza" for people.
Modi said the cut in GST rates and the hike in I-T exemption limit will help households save ₹2.5 lakh crore annually.
"Now, the poor, the neo-middle class, and the middle class are receiving a double bonanza. With the reduction in GST, it will be easier for them to fulfil their dreams," Modi said.
Effective Monday, GST has become a two-tier structure wherein the majority of goods and services will attract tax of 5% and 18%. A 40% tax will be levied on ultra-luxury items, while tobacco and related products will continue to be in the 28% plus cess category.
Since its launch on July 1, 2017, Goods and Services Tax (GST) has been a 4 slab structure of 5%, 12%, 18% and 28% besides, a compensation cess was levied on luxury items and demerit or sin goods.
About 99% of goods under the 12% GST slab currently will move to 5%. The rejig will also result in 90% of items under the 28% tax slab coming down to the 18% bracket.
