Goods and Services Tax (GST), aims at minimizing tax Exemptions with better results. GST is one tax rate policy in overall India. Presently, Centre has 250 Exempted items approximately under excise duty and states have 99 exempted items approximately under VAT. Both Centre and States will provide one common list of items and they should come in exemptions under GST. Around 50% of essential items are exempted from any tax. Basically, items consumed by lower category of society will be given exemption from taxes.
The negative list of services has 18 heads which include healthcare, education, goods transport agency, non air-conditioned restaurants among others.
- Goods like bread, cereals, milk, salt, and the like for daily consumption will remain exempted under GST.
- Alcohol, entertainment tax, custom duty, tax on consumption of electricity, stamp duty have been kept outside the purview of GST. The states may have goods of local importance exempted but that list should be at minimum.
- Food and Beverages – Lactose, Malt extract, preparation of tea, coffee, concentrates for non-alcoholic beverages, natural water and many. Refer S. 38 -2 of GST ACT for the detailed list.
- Medical aids and appliances – Alternative keyboards, Eye pointing framers, Heart monitors, pacemakers, surgical stockings, speech amplifications and many. Refer Schedule 3 of GST ACT.
- Education – Course materials (Books, stationery etc) defined U/s 38-95 of the act are exempted.
- Items of importance in specific states can be exempted. For ex, coconut oil in Kerala, sattu in Bihar and jute in West Bengal.
- Cars for use by Disabled persons are also comes in exemptions under GST.
- The Union Government is also planning to exempting dealers with turnover upto Rs. 25 lakh.
In contrast, premium tea, premium coffee, ready-to-eat food items and biscuit brands, which were earlier exempted, might have to pay taxes under GST.
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