• Source:JND
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GST Rate Cut: The GST Council, chaired by Union Finance Minister Nirmala Sitharaman, has approved major tax reforms, which are set to come into effect on September 22, impacting key sectors, including food, housing, automobiles, agriculture, healthcare, and education. Starting September 22, a simplified two-tier tax structure will replace the previous four-tier tax structure, with rates set at 5 per cent and 18 per cent.

However, luxury and sin goods such as tobacco, pan masala, premium cars, yachts, and aerated drinks will be taxed at 40 per cent plus a compensation cess. These changes, aiming to ease business compliance and lower costs for consumers, will directly impact key sectors.

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GST 2.0: Which Sectors Will Be Benefited?

- FMCG Sector: According to the government, essential commodities are among the biggest beneficiaries of GST reforms. The GST reforms aim to make everyday essentials more affordable, with several products such as soap, shampoos, bicycles, and packaged foods now being taxed at 5 per cent, down from the earlier 12 or 18 per cent slab.

- Home Appliances:Starting September 22, products such as air-conditioners, dishwashers, and televisions above 32 inches will attract 18 per cent GST compared to the earlier 28% GST.

- Construction Sector: The construction sector has received significant relief, with the GST on cement reduced to 18 per cent from 28 per cent. Additionally, granite blocks, marble, sand-lime bricks and other materials will be taxed at 5 per cent, boosting infrastructure development in the country.

- Automobile Sector: Small cars, two-wheelers up to 350cc, and auto parts will be taxed at 18 per cent, down from 28 per cent. Larger vehicles, including buses, trucks, and three-wheelers, will also see the same tax cut.

- Agriculture Sector: Tractors will now be taxed at 5 per cent, down from 12 per cent, while essential agricultural machinery such as harvesters, threshers, sprinklers, and drip irrigation systems will also be taxed under the same bracket. Additionally, bio-pesticides and natural menthol have been shifted to a 5 per cent rate.

- Education Sector: Learning supplies such as pencils, crayons, sharpeners, erasers, and exercise books have been exempted from GST, easing the financial burden on students and parents. Geometry boxes and related school supplies will attract 5 per cent GST, down from 12 per cent.

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- Service Sector: GST on hotel stays up to Rs 7,500/day will be reduced to 5 per cent from the previous 12 per cent. Gyms, salons, barbers, and yoga services will now be taxed at 5 per cent.

- Health Sector: In a major boost to the health sector, over 30 life-saving drugs and diagnostic kits have been exempted from GST. Ayurvedic, Unani, and other medicines will be taxed at 5 per cent along with thermometers, glucometers, and corrective goggles.

(With ANI Inputs)