Daily items such as soaps and toothpastes would be cheaper under GST. Both items are currently taxed at 26% rate but post GST will be taxed at 18% rate. Smartphones and small cars will cost less as well after July 1 GST rollout. The tax incidence on smartphones currently is 13.5 per cent however they will be taxed at a rate of 12 per cent under GST.
Apart from these items, fresh fruits, vegetables, pulses, bread and fresh milk will continue to be placed under the zero-tax category. Food grains would also become cheaper since they have been placed under the zero-tax category too. Presently, food grains attract purchase tax of 2-5 per cent in certain states.
Lower tax incidence on toothpastes would help MNCs operating in the oral care market to become more competitive.