GST 2.0: These grocery items to become cheaper. Tax for milk, cheese, and ghee drops from 12% to 5%

In a huge relief to households, many grocery items will become cheaper with the government revamping the GST system in a bid to simplify the goods and services tax structure to two rate slabs from four.

While the GST on condensed milk, butter, other fats, and cheese has been reduced to 5% from an earlier 12%, the tax for Ultra High Temperature (UHT) milk and paneer has been made completely tax-free from 5% to zero. The new rates are expected to make essential dairy products more affordable for consumers.

Other items that became cheaper include paneer, pizza bread, rotis, and khakhras, which saw tax rates plunge from five per cent to zero. Parathas and parottas, which earlier drew 18%, will incur zero tax now, making them much cheaper. Besides, packaged food items like jams, sauces, pickles, and fruit juices will also cost less. Biscuits, cakes, and pastries, which drew 18% will now be just five per cent. Chocolates and other cocoa products will also be cheaper.

Other items that will see their prices fall include cornflakes, cereal-based foods, soups & broths, ice cream, and pulp-based drinks.

Fruits like mangoes, oranges, and lemons will also cost less. Tax on sugar, jaggery, and sugar syrup has been reduced from 12 per cent to 5 per cent. As for meat and fish, the tax has come down from 12 per cent to 5 per cent, while malt, starch, vegetable thickeners, and glycerol will also cost less.

Dairy industry sees green

The dairy industry is welcoming the major cut, with stocks of biggies already rallying up. The shares of Hatsun Agro Products (2.37%), Parag Milk Foods (1.95%), Dodla Dairy (0.76%), Vadilal Industries (0.05%), and Sheetal Cool Products (0.98%) were trading in the green on Thursday, while Heritage Foods was trading in the red (-0.45%).  Mother Dairy too said it will pass on the benefits of the reduction in GST on a wide range of products to consumers.

 

Business