Guwahati/ 1st of July’2017 (Prag News Desk): At the stroke of midnight, India takes a historic step towards financial integration. Welcoming the Goods Service Tax with the vision of New India.
Applauding the onset of GST in India, Chief Minister Sarbananda Sonowal marked the occasion, “At the stroke of midnight, India takes a historic step towards financial integration.”
He further conferred his regards to Prime Minister Modi and tweeted, “I congratulate Hon’ble PM Shri Narendra Modi ji & Finance Minister Arun Jaitley ji for implementing the biggest tax structure reform since Independence.”
Sharing the prospects of GST in the State, Cm stated that the onset of Goods and Service Tax in Assam is a much needed financial transition that will remove fiscal barriers between States, it will strengthen Assam’s federal structure, augment public finance & boost development spending.
India made the biggest tax system reform in its history when it transitioned to the goods and service tax (GST) regime on Friday night. Sharing the prospects of this historic reform, Prime Minister Modi addressed, “Today marks a decisive turning point, in determining the future course of the country”.
He further stated that the GST would lead to a modern tax administration which is simpler, more transparent, and will help curb corruption in India.
State Finance Minister Himanta Biswa Sarma answered the Indian National Congress’s opposition to GST, he remarked, “Opposition to GST shows INC bankruptcy. It’s shamelessness of worst kind. Instead of supporting India’s boldest reform, they’re sulking.”
The very listing of GST on goods, a preview:
Consumer staples including milk, fruits and vegetables, grain and cereals have been exempted. Sugar, tea, coffee and edible oil will be taxed the lowest rate of 5 percent. Companies that may gain include Hindustan Unilever, Nestle India and Dabur India.
Personal-care items to be taxed at 28 percent, save for hair oil, soaps and toothpaste, which will attract an 18 percent levy. This would impact Colgate-Palmolive India, Godrej Consumer Products, Marico and Gillette India. Smokers be warned: cigarettes will attract a tax of 5 percent on top of the peak GST rate of 28 percent. ITC, Godfrey Phillips and VST may pass on the higher costs.
Here the impact is likely to be marginal. Vehicles already attract different levies, which add up to 28 percent — the peak GST rate fixed for the sector. Gains derived from a unified tax system may still be passed on to consumers, analysts say. Maruti Suzuki India, Tata Motors and Mahindra and Mahindra could benefit.
Appliances such as air-conditioners, refrigerators and washing machines will attract the peak rate, which is slightly higher than the existing tax slab. Companies may increase prices to preserve margins, Nirmal Bang Equities said in a note. Whirlpool of India, Voltas and Havells India could be impacted.
A reduction in tax on coal and metal ore to 5 percent will cut input costs for steelmakers, benefiting companies including JSW Steel, Vedanta, Tata Steel and Hindalco Industries.
Cement makers including ACC and UltraTech Cement may increase prices to offset the impact of the peak rate, though a lower tax on coal is expected to cushion the blow.
A 5 percent tax rate on equipment like solar panels and wind turbines may help keep a lid on project costs for developers such as Inox Wind and Suzlon Energy.