Impact of GST on Daily life

By Registrationwala

6th April 2017

 

GST Bill lays down a destination taxation regime where end users or consumers will be taxed. GST Council has decided to implement four-tier tax structure with lowest tax slab fixed at 5 per cent followed by 12, 18 and 28 %  brackets. GST system has a wide variety of concept which will Impact many industries like Real estate, e-commerce, etc. GST have already been under implementation in some other countries.

GST concept on Common and Luxury goods

The Concept of Goods and Service Tax was introduced to promote One Nation One tax but actually its concept is theoretically different. GST rate going up to 40 % if the flexibility given to the Centre and states are factored. The Centre and the State will separate taxes on goods moving from one city to other and one state to other.

Tax will be imposed on luxury and what is called demerit goods like cigarettes etc. This is a form of under cess which will be provisionally collected for five years after rolling out of GST. GST will bring down the number of indirect taxes currently imposed in the country. There are more than 25 kinds of taxes including income tax are imposed in the country. GST Bill will reduce the number of taxes to around half-a-dozen.

GST on Common household products

Presently tax is not charged on food articles and agriculture products. This will remain unchanged under GST. The nearest tax slab will be applied for about 5,000 commodities and services,

According to the GST Bill, services cannot be taxed over 18 %. 5 % tax will be imposed on articles of mass consumption like spices, packaged salts etc. Tax will not be levied on Food grains.Common household articles like soap, toothpaste, oil etc will be placed in the 12-18 % bracket. Currently, these are being taxed over 20 % rate. The white goods are currently being taxed at 30-31%. Goods like refrigerator refrigerators, washing machine, air conditioners will be brought to the nearest slab of 28 % making them cheaper under GST.

Luxury goods or demerit goods will attract 28% GST plus cess. This includes articles like luxury cars, tobacco products, and other forms aerated drinks.People working at offices and, are used to getting subsidized eatables, goods or services will have to pay more as GST Bill brings such places under the tax net.

Things to become cheaper

  • Fans, Air Coolers, Air Conditioners, Lighting water heaters, LED TVs, Mobile phones, and other electronic items
  • Goods under FMCG such as shampoos, over-the-counter drugs, processed foods, chocolates etc
  • Medical Products (Medicine, drugs, equipment)
  • Readymade clothes including branded apparel
  • Two-wheelers, entry-level cars, and SUVs
  • Due to reduction in Entertainment tax Movie, ticket rates will  also reduce
  • Solar panels, Point of Sale (PoS) machines and fingerprint scanners
  • Cement, paint and other construction material.

       

 

Impact of GST on Daily life

2017-04-06