New GST rates, lower prices — household budgets set for boost, Pg 2.

Key Highlights:

• GST 2.0 came into effect on September 22, following the 56th GST Council meeting on September 3.
• Over 375 common-use goods have reduced GST rates, leading to price cuts by companies.
• FMCG companies like Amul and Mother Dairy have reduced prices on food items like paneer and UHT milk.
• Household items like shampoo, soap, and toothpaste are now in the 5% GST category, resulting in price reductions.
• Cement producers and insurance companies are also passing on the benefits of GST reductions to consumers.
• Maruti Suzuki has reduced car prices by Rs 46,400 to Rs 1.29 lakh due to GST rate cuts.

Detailed Insights:

• The government is urging companies to pass on the full benefits of GST rate reductions to consumers, with the Finance Ministry monitoring price changes.
• Amul has reduced the price of paneer by 3% and Amul Milk Gold by Rs 3 per litre after GST exemption.
• Kellogg's has announced price reductions for corn flakes (11%) and Sunfeast Marie Light biscuits (12%) due to GST cuts.
• Health and life insurance policies are now exempt from the 18% GST, potentially reducing annual premiums by up to 15%.
• Whirlpool has reduced prices of 1-tonne air conditioners by Rs 4,509 to Rs 5,259, and dishwashers by Rs 3,282-Rs 4,336.
• Small cars now attract a GST of 18%, while bigger cars are taxed at 40%, leading to price reductions across the automotive sector.

Key Concepts Involved:

• Goods and Services Tax (GST): An indirect tax levied on the supply of goods and services.
• GST Council: A constitutional body responsible for making recommendations on GST-related issues.
• Input Tax Credit (ITC): A mechanism allowing businesses to reduce their tax liability by claiming credit for taxes paid on inputs.