To improve compliance as well as better suit consumer and industry at large, GST Council since the launch of the new indirect tax regime has been making changes. This time around it has brought about rate cuts, eased compliance for small businesses by widening the scope of the composition scheme as well as simplified return filing.
Consumer goods or FMCG
With the latest rate cut that reduced slab rate for over 100 items previously placed in the highest slab rate of 28% to 18%, consumer goods companies have been the biggest beneficiary as most of these items are of mass consumption. So, from chocolate makers to laundry and other household stuff manufacturers to companies into the cosmetics industry are all going to benefit largely. Also, the reduction in price for end consumer is expected to be large in case of laundry items as before the GST era they were charged at a similar rate with a marginal difference.
The hotelier association made aggressive stand to bring rate cuts with success as now dining at AC and non-AC restaurants shall attract a flat 5% GST as against the earlier tax range between 5-18%. As claimed by the CLSA, for end consumers, the prices at these eateries shall see a fall by 5-6%.
For handmade furniture, the unorganized sector has now a relief coming in as the Council has slashed rates to 28-18%.
All goods used in the aviation industry now will attract a lower rate of 5% as against the previous rate between 28-18% such as aircraft engines, tyres and seats. Also much to the relief of the industry, frequent inter state movement of rigs, spares and goods and tools shall now not amount as supply.
Electrical Fixtures and equipment manufacturers
Electrical fixtures, fans, switches, pumps, cables and other electrical items as specified shall now on attract a lower rate of 18% as against the previous high of 18%. This shall provide a severe boost to companies like Havells who will now pass on lowered prices due to rate reduction to end users.