Mobiles, drugs and medical devices won’t be costlier

The Finance Ministry on Tuesday mounted a public education drive to debunk the media reports of prices of mobiles, medicines and medical devices shooting up because of the upcoming Goods and Services Tax. It picked up these three categories of items that will attract 12% GST to explain that there will be lesser tax burden on all of them, though only marginally as the present taxes on them total up to 13% or 13.5%. Though cement has been bracketed with the items attracting the highest 28% GST, the ministry claimed it would be still cheaper than now since the present total tax incidence works out to more than 31%. The ministry sources said an inference that the construction cost, including those of the infrastructure projects, would go up because of the GST burden on cement is totally misplaced. It pointed out that the total tax burden on smart phones is more than 13.5% as besides 2% central excise, they attract 5 to 15% VAT that varies from state to state. As regards the medicaments, including Ayurvedic, Unani, Siddha, Homeopathic or Bio-chemic systems, they in general attract 6% central excise duty and 5% VAT. If you add up CST, octroi, entry tax, etc., the total tax incidence works out to be more than 13%. The same is true of the medical devices, including surgical instruments.

ENTERTAINMENT CHEAPER: Entertainment in cinema, television, theatre, etc. will become cheaper under the Goods and Services Tax (GST) proposed to be implemented from July 1 in place of the entertainment and amusement tax so far levied by the state governments. Though entertainment events and cinematography films in cinema theatres have been placed under the highest slab of 28% as service tax in GST, a Finance Ministry press note claimed they will be much cheaper as currently some states levy the tax as high as 100%. The GST on the cable TV and direct-to-home (DTH) will be 18% as against the current entertainment tax levied by the states in the range of 10-30%, besides the service tax of 15%.