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Last Updated : Dec 01, 2019 12:13 PM IST | Source:

GST helps households save Rs 320 per month: Report

The reduction in household expenditure is a result of lower indirect taxes or scrapping of GST on several essential items

Implementation of the Goods and Services Tax (GST) has helped households save Rs 320 each per month on consumption of staples such as cereals, edible oil, sugar as well as snacks and sweets, according to a report in the Hindustan Times.

An official told the publication that the amount is not tiny for the poor and the neo-middle class. Lower indirect taxes and scrapping of GST on several essential items has reduced household expenditure in India.

The savings were mentioned in an internal finance ministry note prepared to assess GST’s impact, the newspaper report suggests. Moneycontrol could not independently verify the story.


“In pre-GST era, it (indirect tax) was largely in the range of 21 percent to 33 percent or even more on various goods or services or commodities but with the GST regime, the indirect taxes were reduced on most of the essential goods and services,” an official told the newspaper.

The GST regime came into effect on July 1, 2017.

As there is no GST levied on cereals such as rice and crops, households save Rs 94 per month, the publication cites the internal finance ministry note as saying.

Before GST’s introduction, indirect tax on wheat, flour and rice was approximately 2.5 percent, 2.75 percent and 3.5 percent, respectively.

Other savings in monthly household expenses, as mentioned by the finance ministry, include:

> Rs 15 on edible oils (after lowering GST to 5 percent from 6 percent)
> Rs 6 on sugar (after lowering GST to 5 percent from 6 percent)
> Rs 13 on salted snacks and sweets (after lowering GST to 5 percent uniformly)
> Rs 25 on chocolates (after slashing GST to 18 percent from 28 percent)
> Rs 19 on toiletries and cosmetics (after cutting GST to 18 percent from 28 percent)
> Rs 11 on detergent (pre-GST rate 28 percent, 18 percent after GST)
> Rs 43 on tiles and other sanitary material (pre-GST rate 28 percent, 18 percent after GST)
> Rs 24 on furniture and coir products (5 percent and 18 percent respectively, after GST)

> Rs 70 on spices, curry paste, hair oil, soap, toothpaste, rubber bands, footwear, brooms and school bags.

The high impact of GST on the cost of several products is also because of several local taxes and other levies that were scrapped after the introduction of the new indirect tax system.

“Levies like entry tax and octroi had an impact of about 2 percent on the cost of products,” an official told the publication.

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First Published on Dec 1, 2019 12:13 pm
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