ACs, Refrigerators, Video Games To Be Cheaper As Centre Preps To Cut GST
Air-conditioners (ACs), refrigerators, washing machines, digital cameras and video games are set to become cheaper with the government preparing to lower the Goods and Services Tax (GST) on most consumer goods.
While the GST on ACs, digital cameras and video games is at the highest slab of 28 per cent, refrigerators and washing machines are taxed at the rate of 18 per cent. To simplify the indirect tax regime, the government plans to move most goods to a GST of 18 per cent and below.
The decision could be cleared by the GST Council as early as Saturday.
Prime Minister Narendra Modi had said at an event on Tuesday that the government was "approaching a stage where 99% items can be brought under 18%."
He also said "...We firmly believe that GST must be as simple as possible, and we are also working constantly in that direction," PM Modi said at the event in Mumbai.
Other items likely to get cheaper include water heaters, paints, perfumes, tractors, and auto parts and accessories, vacuum cleaners, shavers and hair clippers, besides cement, putty, varnish and marbles, the sources added.
"97% of all items has 18 per cent or lower tax. If the PM takes this to 99% of all items, only excluding non-merit goods, will be positive news. As the GST net widens, all these items will gravitate towards the 15% mark. This will give huge impetus to consumption and demand," said Rajiv Kumar, Vice-Chairman of NITI Aayog.
Faulty implementation of GST along with demonetisation are seen by many as the two big economic steps that played a role in the government's recent election setbacks in three big BJP-ruled states.