New GST rates effective from today:Prices of paneer, ghee, soap, shampoo along with car, AC reduced; old stock will also be cheaper

Essential items will now be taxed in only two GST slabs, namely, 5% or 18%, from September 22. The government has done this to simplify the tax system. This will make everyday items like paneer, ghee, and soap-shampoo, as well as AC and cars, cheaper. This decision was taken in the 56th meeting of the GST Council. Finance Minister Nirmala Sitharaman announced this on September 3. We are explaining all essential information related to this change through answers to 9 questions… Question 1: What changes have been made to GST rates? Answer: The government announced on September 3 that GST slabs of 5%, 12%, 18%, and 28% have been reduced to two slabs. Now there will only be 5% and 18% slabs. Additionally, a special tax of 40% will be levied on tobacco, pan masala, carbonated drinks, and luxury items like large cars, yachts, and aircraft for personal use. Some items like cottage cheese, paneer, roti, chapati, and paratha will now be tax-free. Except for tobacco, new rates will be applicable on all items from tomorrow, September 22. Question 2: Will changing tax slabs be beneficial or harmful? Answer: This change will make daily use items like soap, shampoo, food and beverages, electronic goods, and cars cheaper. The 18% tax on life and health insurance has also been reduced to 0. So, it will be beneficial. Apart from these items… Let’s understand this with an example… Before the change: Suppose a hair oil bottle was priced at Rs 100 and had 18% GST on it, then the calculation would be like this… GST = Rs 100 18% = ₹18 Total Price = ₹100 + ₹18 = ₹118 After the change: New GST is 5% GST = ₹100 5% = ₹5 Total Price = ₹100 + ₹5 = ₹105 Benefit: The bottle that was available for 118 rupees earlier will now be available for 105 rupees. That means, there will be a benefit of 13 rupees. Question 3: Will old stock with higher MRP also be available at cheaper rates? Answer: The government has said that even if the MRP is higher on old stock, these items will be sold at the new rate only. Customers must be given the benefit of reduced GST rates. Meanwhile, for medicines, the National Pharmaceutical Pricing Authority (NPPA) in its orders dated September 12 and 13, has stated that— Question 4: What to do if the shopkeeper doesn’t pass on the GST reduction benefit? Answer: If the shopkeeper does not pass on the price cut benefit to customers, you can file a complaint. Guilty shopkeepers can face penalties or jail term. Question 5: Will Life and Health Insurance premiums decrease? Answer: Yes, the government has reduced GST on life and health insurance premiums from 18% to zero. Renewal premiums paid after September 22 will also not attract GST. Let’s understand how much the premium will reduce with an example. Let’s say there is a family health insurance policy with a premium of ₹50,000: Base Premium: ₹50,000 Premium with 18% GST: ₹59,000 Premium with 0% GST: ₹50,000 Benefit: ₹9,000 Note: These figures are for example only. Actual premiums may vary. Question 6: Will some goods become more expensive due to GST changes? Answer: Yes, a new 40% slab has been created for luxury and indulgence items. This includes products like pan masala and tobacco. Additionally, some cars and bikes will come under the 40% tax bracket. However, these vehicles won’t become more expensive. Previously, they had 28% GST plus up to 17% cess. That means the total tax was 45%, which has now reduced to 40%. Question 7: Are there some items whose prices will not change₹ Answer: Yes, in GST 2.0, prices of about 90% items have changed, but there are some items for which GST rates have not been changed. Question 8: Will hotel bookings, flight tickets, and cinema tickets also become cheaper? Answer: Hotel room bookings, beauty and health-related services GST has been reduced from 18% to 5%. Cinema tickets up to Rs 100 will have 5% tax, which was earlier 12%. Tickets above Rs 100 will have 18% GST. Let’s say a hotel room costs ₹5000. Earlier it had 12% GST. Now it will have 5%, so the calculation will be like this… Before September 22
GST = ₹5000 12% = ₹600 Total price = ₹5000 + ₹600 = ₹5600 After September 22:
GST = ₹5000 5% = ₹250 Total price = ₹5000 + ₹250 = ₹5250 Savings: ₹350; the hotel room that was available for ₹5600 earlier will now be available for ₹5250. Meanwhile, in air travel, economy class will be cheaper, and business class fares will be more expensive. There will be no change in first class. Economy class previously had 12% GST. It has been reduced to 5%. Business class GST has been increased from 12% to 18%. Question 9: What will be the impact of the new GST on the economy? Answer: The government claims that GST 2.0 will provide relief to common people, make doing business easier and boost the economy.