5 GST New Updates that you have to know

You must have heard about the GST new update. In this article, we are going to talk about what are the changes that are being made in GST and what all things will be beneficial from them, mainly who will benefit from them.

But before that, I want to tell you in short what is GST?

What is GST?

Earlier, when we used to buy any goods, thing or service, many types of taxes were levied on it like sales tax, excise duty, service tax, etc.

Then all these taxes were different in every state and their rates were also different, due to this there was a lot of corruption.

Then the government created a new tax by combining all these taxes at one place and named it “GST”.

GST makes paying tax easy and also reduces corruption.

Hope you have come to know what is GST? Without wasting time let us move ahead and find out what GST new updates the government has given in GST this time.

GST New Updates

Earlier there were 4 slabs in GST: 5%, 12%, 18%, 28%.

Now the government has converted these into just 3 slabs under the GST new updates: 5%, 18%, 40%.

Some of the items which earlier had 12% GST, have been put in the 5% slab and some other items have been put in the 18% tax slab.

Similarly, some of the items which earlier came under 18% have been put in 5% in the GST new update.

Some of the items which earlier had 28% tax, have been put in the 18% slab in the GST new update and some other items have been put in the 40% tax slab.

And most importantly, the things which were earlier taxed at 5% have now been made 0% i.e. tax free in this GST new update.

Things Become Cheaper After GST New Update

Milk and Dairy Products

Milk and dairy products which come in packets like curd, fresh cream, paneer, ghee, etc. will now become cheaper because all these things which were earlier taxed at 5% have now been brought to 0% tax slab i.e. made tax free in the GST new update.

Due to this, all dairy products will now become cheaper.

Farming Related Items

This time in the GST new update, farmers will get some relief as fertilizers and farming products have also been put under 5% tax slab from 18% tax slab, that is, they have now been made cheaper.

Due to this, all the things that were useful in farming will also become cheap now, which will provide some relief to the farmers.

Farming products	Before GST updates	After GST updates
Tractor (35 to 75 hp)	18%	5%
Tractor tyre and parts	18%	5%
Drip irrigation system	12%	5%
Power Tiller, Thresher, Seed Drill	12–18%	5%
Tractor Mounted Sprayer	18%	5%
DAP, NPK, Potash	12–18%	5%
Urea	5%	5% same as

Now you must have known how farmers will benefit in the GST new update.

Insurance

Before the GST new update, any type of insurance was subject to a GST of 18%, which made insurance very expensive.

For example, if the yearly premium of any health insurance was Rs. 25,000, then an extra charge of Rs. 4,500 was levied due to the 18% tax, which made the insurance costly and cost Rs. 29,500.

But after the GST new update, insurance will become very cheap because all insurance has been kept in 0% tax slab i.e. tax free.

Now you will not have to pay any tax on taking any type of insurance, due to which insurance will become cheap.

 Cars and Bike

Cars

Cars have been divided into two parts. In the GST new update, there will be different tax rates for small cars and different tax rates for big cars.

Small Car Criteria as per GST new update

Petrol cars with engine capacity up to 1200 cc

Diesel cars with engine capacity up to 1500 cc

Length of car must be less than 4 meters

Earlier these small cars were charged 28% GST + cess (state-wise).
Now in the GST new update small cars have been placed in 18% tax slabs and no type of cess will be charged.

This will reduce the prices of small cars a bit. Now even a middle-class person will not face much difficulty in buying a car.

Bikes

Just like cars have been divided, similarly bikes have been divided into two parts in the GST new update.

Bikes with engine less than 350 cc → Small bikes (18% GST)

Bikes with engine 350 cc or above → Luxury (Big) bikes (40% GST)

Earlier small bikes were charged 28% GST but after the update only 18% GST will be charged.

Luxury (Big) bikes are now placed in the 40% tax slab instead of 28%.

With this new update, the middle class will get some help in buying a bike because with the arrival of this update, the price will be less by 10%.

Indian Breads

Before the GST new update, all Indian breads (roti, paratha, naan, chapati, pizza, bread, tandoori roti, puri etc.) were taxed at 5% but after the update, these things have been made completely tax free.

So, if this happens now, eating will become a little cheaper.

Things Become Expensive After GST New Update

The government believes that if tax is reduced on things which come in lesser quantity every day, and if tax is increased on things which are harmful (sin products) or luxury products, then people will buy necessary things more and luxury/sin things less.

That’s why, in the GST new update, luxury and sin products have been put in the 40% tax slab.

Earlier, luxury products had 28% GST + different cess (state-wise).
Now this has been simplified and made into a flat 40% tax (no cess).

Product name	Earlier GST rate	Earlier cess	Now GST rate	Now cess
Big cars (SUVs, 1500+ cc engines)	28%	15% (luxury)	40%	No cess
High engine bike (350+ cc engines)	28%	12% (luxury)	40%	No cess
Yachts, helicopters, private jets	28%	20% (super luxury)	40%	No cess
Cold drinks (Coca-Cola, Pepsi etc.)	28%	12% (compensation)	40%	No cess
Energy drinks (Red Bull, Monster)	28%	15% (caffeinated)	40%	No cess
Pan masala, gutkha, cigarette, beedi	28%	60–290% (comp. cess)	40%	No change
Online gambling & gaming services	18%	No cess	40%	No cess

I think now you must have guessed what changes have been made mainly by the GST new update. If you want to see any product in which tax slab it is placed, I have already put a list for that; click here to see.

Please leave a comment. Have a good day