Hyderabad Cheers Cheaper Foodstuffs, Puzzled By Tax Cut On Namkeens

Hyderabad:The new two-slab Goods and Services Tax which is set to take effect on September 22 is being described by experts as historic and the most far-reaching change since it was rolled out in 2017.

Tax rates on essentials and household goods have dropped to five per cent, while larger appliances, cars and building material change to 18 per cent. A 40 per cent slab has been created for luxury and sin items which leaves tobacco, pan masala and sugary drinks costlier.

Girdhari Toshniwal, founder partner of PPKG & Co and vice-chairman of the Hyderabad branch of ICAI, explained that the change could mean a `100 notebook will now cost about `95, while small cars could see discounts ranging between `30,000 and `1 lakh.

Everyday items like butter, shampoo, paneer and parathas are either tax free or taxed at five per cent. Cement, televisions, refrigerators and washing machines change to 18 per cent. Health and life insurance premiums will not be levied 18 per cent GST and become cheaper for policyholders, though insurers lose the input credit they earlier claimed.

Items such as UHT milk, packaged paneer, rotis and notebooks move into the zero-GST category which removes tax from products families use every day.

“Butter paneer everyday now,” jokes Ritu Roy, a student in the city, adding, “Also loving the idea that stationeries is now tax free. It will save me a lot of pocket money hopefully.”

Talking more on the new reforms, CA Toshniwal added, “Immediate registration within three days, automated refunds for inverted duty structures, and a single registration for e-commerce are major changes. GST tribunals are also to be in place by December, which taxpayers have waited for since 2017. I don’t think there will be confusion. Twenty days is enough to be prepared for new invoicing.”

Hyderabad residents are already doing the math. Arvind Kanoria, a city-based engineer, said, “Daily expenses eat up so much of our salaries here. If butter, milk, and soap are genuinely cheaper from this month, it gives families like mine some breathing space.”

However, he also added that he recently bought a high-end bike and feels lucky about the timing. “I heard 40 per cent tax will be imposed on bikes above 350cc. That is crazy and does not make sense. I have been very lucky with the timing it seems. India was just starting to have great bikes made out of India, with international brands coming into the picture and exporting too. Maybe this will reduce the incentive and demand. But it's also bad for bike enthusiasts.”

Also concerned are health experts owing to the GST cut on namkeens and ice-creams. “As doctors we welcome any tax policy that makes healthy choices easier for people. However, lowering taxes on ultra-processed foods like ice creams and packaged namkeen may send the wrong signal at a time when India is already struggling with rising lifestyle diseases. Public policy should ideally incentivize nutritious, affordable food while discouraging junk consumption. Our focus must remain on long-term health, not just short-term economic relief,” said Dr Aviral Mathur, former president of FORDA.