GST proposes lesser tax for Sugar, Tea ,Coffee and Milk Powder
 Source : News Bharati English  Date : 26-May-2017

New Delhi, May 26: India has a complex tax system. Good and service tax(GST)  is one indirect tax for a whole nation which will help to India, a common unified market. It may act as a game-changer for Indian business. Under this new taxation system, proposed GST Tax rates would be lesser than the prevailing taxes in case of Sugar, Tea, and Coffee. New GST rate proposes 5% tax for sugar whereas the present incidence of taxes on sugar is 8%. According to proposed GST, tax on Milk Powder, Tea and Coffee would decrease by 2%.

Sugar attracts specific central excise duty of Rs.71 per quintal plus Sugar Cess of Rs.124 per quintal, which translates to ad valorem rate of more than 6%. Including incidence on account of account of CST, octroi, and entry tax etc., the present total tax incidence would work out to more than 8%. As against this, the proposed GST rate on sugar is only 5% i.e. 3% less than the present incidence of taxes.

Tea and coffee attract Nil central excise duty and VAT rate of 5%. Considering embedded taxes in the production of tea and coffee and the incidence on account of CST, octroi, and entry tax etc., the present total tax incidence works out to more than 7%. As against this, the proposed GST rate for tea and coffee (other than instant coffee) is only 5%.

Milk powder attracts Nil central excise duty and 5% VAT. Considering embedded taxes in the production of milk powder and the incidence on account of CST, octroi, and entry tax etc., the present total tax incidence works out to more than 7%. As against this, the proposed GST rate on milk powder is only 5%.