New Delhi: Tax rates cleared by the all powerful GST Council will bring cheer to the industry as prices of consumer products are likely to drop with the implementation of the new indirect tax regime from July 1, experts said.
The GST Council, comprising state finance ministers and headed by Union Finance Minister Arun Jaitley, today finalised the rates on a host of items.
"On rates, categorisation of several consumer products like soaps, toothpaste and hair oil under 18 per cent is good news and should see prices drop for consumers. Similarly, several food items such as edible oil, tea, coffee sugar etc have been kept at 5 per cent...Which would also bring cheer to the industry," said Pratik Jain, tax expert with PwC.
Overall, today's announcements were positive as it appears that the rate fitment has been done keeping in mind the intent of rationalizing the effect of inflation on account of GST, opined Rajeev Dimri of BMR & Associates LLP.
The Goods and Services Tax (GST) will subsume most of the indirect taxes and lead the country towards 'one tax one nation'.
In her comments, Saloni Roy of Deloitte Haskins & Sells LLP said there is an expectation for a clear indication on whether the date of GST implementation continues as July 1, which is barely 42 days away.
V S Datey, Senior Consultant with Taxmann.Com said the rates announced are along expected lines.
"As government had already stated that they will not disturb the existing tax structure and they have kept their words, however it seems a lot of work is yet to be done," he said.
Tax Partner with EY India Suresh Nair said the Council has done a commendable job to have the rate fitment for 81 per cent of the commodities within and up to the 18 per cent GST rate slab.
Sudhir Singh of Marg ERP9+ said that the uncertainty on "how will a distributor avail input credit tax after GST implementation for the goods manufactured/ purchased is preventing traders from buying goods and is creating stagnancy in the market".