GST On Discretionary Items: Here's How India Fares Against Other Countries
NDTV Profit compared the GST rate on discretionary items like televisions, fridges, washing machines, computers, and phones with other countries.
The GST Council chaired by Finance Minister Nirmala Sitharaman has announced reforms that have brought significant relief to consumers by slashing GST rates on a range of discretionary items.
The GST Council has reduced the goods-and-services-tax rates to 5% and 18%, eliminating the existing four-tier structure. The revised GST rates will come into effect from Sept. 22.
The government has removed the 12% and 28% tax slabs. However, 'sin goods' like tobacco and related products, including cigarettes, will attract a hefty 40% tax.
Let's take a look at five common discretionary items and their indirect tax rates across various countries. NDTV Profit compared the GST rate on discretionary items like televisions, refrigerators, washing machines, laptops, and phones with other countries.
When comparing these India GST rates with tax rates in other countries, India’s reduced rates stand out as noticeably lower:
United Kingdom: Discretionary items like televisions, fridges, washing machines, laptops, and phones are generally taxed at the standard VAT rate of 20%. This is substantially higher than India’s 5% GST, indicating a heavier tax burden on such items in the UK.
United States: The US does not have a nationwide sales tax; instead, sales tax rates vary widely by state, typically ranging between 2.9% and 10% on discretionary items like televisions, fridges, washing machines, laptops, and phones.
Australia: Australia levies a 10% GST on most household items and discretionary items including televisions, fridges, washing machines, laptops, and phones, which is double the recent lowered Indian GST rates. This highlights India’s progressive tax cuts aiming at consumer relief.
Japan: Same as Australia, Japan's tax structure is called Japan Consumption Tax, which levies 10% GST on most discretionary items. As of 2019, JCT rate of 10% (standard tax rate) or 8% (reduced tax rate) on, in general, all goods imported into or manufactured in Japan.
UAE: Value Added Tax or VAT in the UAE has a standard rate of 5% which applies to almost all goods and services supplied within the country, including electronics and telecommunication-based goods. However, some key sectors like healthcare, education, and exports are either exempted or not taxed at all.
