New Delhi: The government on Monday said the GST, scheduled to be rolled out from1 July, is set to benefit consumers as tax incidence on smartphones, medical devices and cement will come down.
The detailed analysis from the finance ministry comes days after the GST Council, comprising ministers from the Centre and states, decided on product-wise tax rates and the government threatened to invoke the anti-profiteering clause if the gains were not passed on from July, the scheduled date for GST launch.
A smartphone currently attracts two per cent central excise duty, besides the value-added tax (VAT), which vary from state to state (five per cent to 15 per cent).
“The weighted average VAT rate on smartphones works out to about 12 per cent. Thus, the present total tax incidence on smartphones works out to more than 13.5 per cent. As against this, the proposed GST rate for smartphones is 12 per cent,” the finance ministry said.
In the case of medical devices, the present tax incidence works out to more than 13 per cent, while it would attract a GST of 12 per cent.