‘Prices of consumer goods down under GST regime’

  • | Thursday | 20th July, 2017

In a statement, the Commissioner said that under GST, the prices of most of the consumer goods, electrical and electronic goods and vehicles had come down. Under the GST regime, the tax paid on most of the goods will be lesser or equal to the tax paid on such goods in the pre-GST regime. However, the public had a perception that the levy of GST has increased the price of the goods and services. The levy of tax under GST on the goods from the point of manufacture till it reaches the consumer will be comparatively lower than the previous tax. Likewise, the prices of toothpaste, soap, detergent powder, plastic items, electronic and electrical goods have also come down.

more-in The Commissioner of Commercial Taxes has urged the public to not trust the misinformation being spread on social media about a hike in tax rates following GST implementation. In a statement, the Commissioner said that under GST, the prices of most of the consumer goods, electrical and electronic goods and vehicles had come down. However, the public had a perception that the levy of GST has increased the price of the goods and services. Under the GST regime, the tax paid on most of the goods will be lesser or equal to the tax paid on such goods in the pre-GST regime. The levy of tax under GST on the goods from the point of manufacture till it reaches the consumer will be comparatively lower than the previous tax. As an example, the prices of two wheelers and four wheelers have considerably reduced. Likewise, the prices of toothpaste, soap, detergent powder, plastic items, electronic and electrical goods have also come down. For instance, in the pre-GST regime, if the value of biscuit is ? 100, excise duty ? 6 (@ 6%) was levied and the cost of the biscuit becomes ? 106, on that amount VAT of 14.50% was levied. The consumer was buying the biscuit at a final price of ? 121.37. However, under GST, the same biscuit's value is ? 100, GST ?18 (@18%) will be levied and the final price of the biscuit will be ? 118, which means the final price of the biscuit has come down by ?3.37, the Commissioner said. Likewise, the prices of many commodities would come down, for which the manufacturers and dealers shall adjust the price accordingly and display the new rate with a sticker without hiding the old MRP rate. Addressing the trading community, the Commissioner pointed out that in GST, those dealers whose all India aggregate turnover is more than ? 20 lakh per annum should get themselves registered. There is no compulsion for the dealers whose turnover is less than ?20 lakh to get registered. However, they can obtain registration under GST at their discretion even if their turnover is less than ? 20 lakh. All the dealers, regardless of their turnover, are eligible for full input tax credit on the purchase/receipt of goods or services used in the course of furtherance of business. Further, for small dealers whose turnover is upto ? 75 lakhs per annum, there is a beneficial and simple composition scheme, whereby they can pay tax at lower rates i.e 5 % for restaurants, 2% for manufacturers, 1% for other dealers and file returns quarterly and even make purchases from other States.

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