The Goods and Sales Tax is a significant introduced by government after demonetisation. Formed with the notion of “One nation, one market, one tax”, GST rates will varies from 5%, 12%, 18% and 28%. To make the economy developing, it will be levied on each stage of production – furthermore in the supply of product as well. Being a biggest tax transformer, GST has changed the taxation policy. Taxes such as Central Excise Duty, VAT, Sales Tax, Luxury tax, Entertainment tax etc. are subsumed under the common Good and Sales tax. There is a lot of chaos, what exactly is GST. Bringing out the changes in sector affected of this sceme, you will be able to grasp the concept of GST.
The GST rate in the sector of multiplex has been fixed 28% over the tickets costing over 100 bucks. In history, the higher return will be expected from this industry.
Burdened with heavy taxes, telecom companies will pay 3% additional tax as GST over the normal charges. Companies such as Airtel and Idea will cover this additional cost through Prepaid services.
Apparel costing below 1000 will cost 5% goods and services tax. Companies may increase the price of branded products as 12% GST will be levied on the product costing above 1000.
Depending on the variation level of GST, the tax on hotels charging room for Rs. 7500 will charge 28% tax. On the contrary, costing below 1000 the tax will be exempted.
Expected to have a tax of 5% the tax levied on jewellery is 3%. Moreover, jewellery making charges has been reduced from 18% to 5%. Henceforth, this commodity won’t affect the market directly.
6. Construction Goods
Varied on the nature of real estate, the GST varies between 11% to 18% earlier. Fixing to 18% the rate is permanent in construction sector. This is the first sector which is going to be benefited from GST tax policy.
Drinks like the Aerated Drinks will be 28% under goods and services tax which are 23-24% currently, non-aerated drink like Fruit Juices will remain the same at 12%. Whereas daily grocery items like Sugar, Edible Oil will remain in the slab of 5%-6%.
Pharma will have a good GST relaxation where Life Saving API will have 5% GST tax which is currently 5-8%. Formulations will have an increased price where the tax will be 12% which was earlier 9%.
9. Consumer Durable
Consumer Durable include the daily electronic items like AC, Refrigerators, Coolers will have 28% tax which were earlier 26%. Well it will effect your pocket a little bit. To incorporate the use of LED at a larger scale government has reduced GST over LED lighting from 15% to 12%.
Yes there are exemptions to certain goods that are GST-Free these item include Milk and Milk Products like Curd, Butter Milk, Lassi, Paneer. Natural Honey, Baby Food, Food Grains, Fresh Vegetables except the Frozen food with a brand name.
Fuel item like Domestic LPG, Kerosene will have a 5% tax rate. Whereas other Petrol and Diesel are kept out of this scheme now but can be included in future.
12. Cigarette and Spirit
Well smoking and alcohol will give a big dig at your pocket as they will be having 28+% tax that include charges from 1000-5000. So as a noble human being we recommend you to give a thought it can save your life and money both. So its actually a profit.
This was a brief outline of various Goods and how they will effect your pocket and nation. Still confused if this is good or bad look at the following point:
Advantages of GST to Citizens:
- Simpler tax system
- Uniform prices throughout the country
- Transparency in taxation system
- Increase in employment opportunities
Advantages of GST to Industry and Trade:
- Reduction in multiplicity of taxes
- Mitigation of cascading/double taxation
- More efficient neutralisation of taxes especially for exports
- Development of common national market
- Simpler tax regime-fewer rates and exemptions
Advantages of GST to Government:
- A unified common national market to boost Foreign Investment and “Make in India” campaign
- Boost to export/manufacturing activity, generation of a lot of employment, resulting in reduced poorness and increased Gross Domestic Growth
- Improving the overall investment climate in the country which will benefit the development of states
- Uniform SGST and IGST rates to reduce the incentive for tax evasion