Posted by Archana Permi
August 8, 2017

NOTE: This post has been self-published by the author. Anyone can write on Youth Ki Awaaz.


GST is proposed to claim one nation one tax system but what one sees is that the effect of this on various industries will be different. These can be categorized as follow:

  • Effect based on which slab the services or goods fall into.
  • Effect based on industry type (i.e.,) whether the industry deals with manufacturing, distributing, and or retailing or providing of services because the GST rates for goods and services are different.

But a common man who is the final consumer has only one question in his mind as which are the products that would increase his expenses and which are the products that would help him save big under GST regulated bazaar. But let’s first learn about the GST Rate Slab pools and also analyze as why these are stacked as 0%,5%, 12%,18% and 28% (i.e., nothing but GST rates item wise)

Well, there are numerous articles in circulation listing GST rates item wise but what one has to magnify onto is that what could be the possible impact on business sectors taken individually. Let’s assemblies this by taking any two sectors for a study:

0% GST Rate – Farm products, dairy products, vegetables, fruits etc.,
5% GST Rate – Branded, packed foods, spices, medicines etc.,
12% GST Rate – Frozen foods, animal, and vegetable fat oils, tobacco etc.,
18% GST Rate – Capital goods, intermediate items used industries
28% GST Rate

– Govt classifies these goods as white goods like (washing        machines, air conditioners, soaps and detergents, refrigerators,      tobacco, tobacco products, aerated drinks, pan masala, luxury      cars)


Example 1:

GST rate on Pharmaceutical Sector:

    Previous Regime-

  • VAT @ 5%Excise @  12.5%Total > 18 %
  • These markets were operating in excise free zones paying less than 1.5 % excise and paying VAT on MRP and collected on first stage letting loose the distribution channel un-regularised.

    GST Regime-

  • GST @ 5%
  • The supply channels working in a un-regularised manner nor paying the taxes on purchases and nor collecting taxes on sales, but this won’t be continuing under GST as they would now require getting registered as well file the returns.
  • Lot of the times, we have witnessed in medical shops that medicines were provided without bills , but GST would now make sure that this is eliminated as without bill means no ITC flow in the distribution channel, and no ITC means an increase in the cost of product and no place to find market for the product.
  • What customer stands to gain from this?? Health care facilities would become affordable by the flow of tax credit throughout the distribution channel, and also by the availability of tax credit on imported technical machinery and equipment’s which would make the treatment cost less costly.


Example 2:

GST rates on Auto Mobile sector:

    Previous Regime-

  • Let’s consider small cars segment: Excise 12.5% + cess 1.1% + Vat 14% + Road tax = 28%

    GST Regime-

  • CGST 9% +SGST 9% = 18 %
  • We can see that GST has favored this sector making the dream come true for middle and middle upper segment because they can now afford a car.


GST being split item wise, slab wise and rate wise is a creative infrastructure (a brain of bodies of individuals) will subsume very many taxes and provide us a single brick called GST to build prosperous and happy homes for generations to come. One can also brief oneself with articles relating to GST rates across different sectors like GST on automobiles, luxury items etc by visiting official pages from accounting software companies example Tally, Reach Accountant etc., as these companies not only want to stick alone to provide accounting solutions alone but they also want to have the users latest information, to have a better understanding of the services provided by them by enriching the readers of information about GST.

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