Under GST reforms, the government may reduce the tax on cocoa-based chocolates, pastries, flakes, and ice cream from 18% to 5%. This is expected to significantly lower the prices of these popular packaged foods, providing relief to consumers. A decision on this matter could be taken during the GST Council meeting scheduled for September 3-4.
GST Reforms: As part of GST reforms, the government is considering reducing the GST on cocoa-based chocolates, pastries, flakes, and ice cream from 18% to 5%. This move will bring down the prices of these popular packaged foods and offer relief to consumers. The Fitment Committee has recommended that changes in the tax slabs will make everyday items more affordable. The final decision will be made at the 56th meeting of the GST Council, which will be held in New Delhi on September 3 and 4.
Relief for Children and Youth
Chocolates, pastries, and ice cream are among the most favored food items by children and youth. If the GST slab is revised, their prices will decrease, offering considerable relief to common consumers. This will also make these packaged food products more accessible to a wider population.
GST 2.0 and Fitment Committee's Recommendation
As part of the ongoing reforms under GST 2.0, the Fitment Committee has recommended reducing the applicable GST from 18% to 5% on products like cocoa-containing chocolates, cereal-based flakes, pastries, and ice cream. This step will not only make these products more affordable for consumers but also help boost market demand.
GST Council Meeting
The 56th meeting of the GST Council will be held in New Delhi on September 3 and 4 next week. The Fitment Committee's recommendation will be the subject of the final decision at this meeting. If the Council approves it, the prices of chocolates and ice cream will decrease. Additionally, pastries and flakes will also become considerably cheaper than before.
Impact in Cities and Semi-Urban Areas
This change will make snack items like chocolates, pastries, and flakes more affordable not only in major cities but also in semi-urban areas. This move will help increase both the reach and popularity of these products.
Benefit to the Common Public from GST Reduction
Currently, items included in the 18% slab contribute a significant portion to the total revenue generated by GST. However, the government's objective is to reduce taxes on everyday consumer goods. This will lessen the burden on the pockets of the common public and reduce inflationary pressure.
Officials state that reducing GST rates on widely purchased food items will benefit consumers and help streamline the indirect tax infrastructure.
Prime Minister's Announcement
It is noteworthy that on August 15, Independence Day, Prime Minister Narendra Modi announced GST reforms from the Red Fort. He stated that new GST reforms, including a review of existing rates and rationalization of tax slabs, would be implemented by Diwali.
According to sources in the Finance Ministry, such a change in GST slabs could impact the revenue of both central and state governments. It is estimated that this could lead to a revenue shortfall of approximately ₹40,000 crore.
