Narendra Modi, the pioneer of the era of GST introduced a system which is proclaimed to be the biggest monetary reform in India. This economic revolution in India has set tongues wagging across media.
BUT, amidst the commotion of ‘One Nation, One Tax, you must know some titbits that will change your day to day shopping habits.
- Total 160 countries implemented GST. France was the first country to implement it way back in 1954 and after 63 long years later India finally managed to achieve the embodiment of simpler taxation.
- Total 40 tax excises including 17 types of taxes and 23 types of cesses have been merged into 1 single tax – GST. It is going make your life a lot simpler than earlier.
- 4 tax slabs offered under the GST system. Items will be levied on either 5%, 12%, 18%, 28%. There is a procurement for maximum tax limit of 40% on certain items.
GST would have an impact on the household items you buy; hence this would impact your budget. Also if you are an investor in stock markets, some of the companies would loose and rest will be benefited. It is an opportunity for you to grab the stocks that would get benefited with GST implementation in India.
In the case of every approach, GST has come up with two outcomes. While some of the items and services have turned exorbitant, the prices of others have decreased substantially.
Now Let’s get to the point: How GST will benefit you?
Entertainment Stuff:
In Indian States (especially in metropolitan cities) the tax changed on movie tickets ranged from 10% to 110%.
- This will cut back to 18% to 28% tax on movie tickets costing below 100 or above respectively.
- Living in a city like Delhi and Mumbai where ticket prices included taxes as high as 50% earlier, a happy movie weekend is definitely on cards!
Restaurants:
If you have your birthday coming and you are planning to treat your buddies at a food joint, this piece of information is for you.
- Dining will cost you no less than 28%.
- While relishing your favorite dish at normal AC restaurants would get little pricey at 18%.
- But, masticating cookies or snacking at non-AC bistros would turn a cheap affair for you at 12%.
Travel:
Though traveling will not outlay the boundary of your savings in general class for air and rail.
- Business class airfares are now taxed at 12% up from 9% earlier.
- While an economy class airfare now costs lesser at 5% from earlier 6%.
And for Indian Railways:
- A journey in first class or AC classes would attract 5% service charge marginally up from 4.5% charged earlier.
- While sleeper and other non-AC train tickets remain unaffected by GST.
Fashion:
Shopaholics are going to have a tough time.
- 12% will be the new tax rate against 5% earlier.
But since the raw materials would get cheaper, the final buying price won’t skyrocket in the long term.
- Apart from this a pair of shoes costing you less than Rs 500 and other apparels costing less than Rs 1000will turn cheaper in GST regime.
Automobile:
The taxation impact of GST in automobile industry seems to be for big thinkers.
- The GST rate has been clinched at28% excluding cess which will make small and medium-sized cars expensive.
- luxury cars and SUVsworth 50 lakhs can become cheaper anywhere between Rs 50,000 to 2.5 lakhs!
- Motorcycle and scooters will be benefitted by revised taxes and turn cheaper.
Hotels:
It can be a family holiday trip or a routine business trip. Are you up? Then make a note of it. As the new taxation will aid you.
- Earlier a room in luxury hotel costing Rs 5000 or above used to attract 28% tax will now be taxed only if the price is above Rs 7,500.
- This means 18% GSTwill be levied on hotel rooms in the range of Rs 2,500-7,500 which is still cheaper than the earlier effective rate of 21%.
Aforementioned includes all the points which are going to affect you for the new taxation. Still, there are many essential items which are completely exempted from GST. For instance, food grains, cereals, milk and supplements, oil, vegetables, confectioneries, contraceptives, printed books, glassware, handicrafts and much more.
Conclusion:
- First of all, It will save you and me from the complex taxation system, pave way for further transparency and make our lives simpler through ‘Good Simple Tax’ (acronym).
- The Government should make an attempt to sequester the vast poor population of India against the likely hike due to the implementation of GST.
- GST focuses on the elimination of price discrimination. It means all the items will be available at same prices across the country.