The country is waiting for its first ever largest change in tax system after independence, the GST (Goods and Services Tax). Everyone is talking about the impact of GST on their daily life. Misconceptions are revolving in people’s mind; everyone wants to know which item is going to be cheaper and for which item they have to pay more.
Although the picture was almost made clear by the government in its GST council meeting held on 18 may, 2017 where rates of almost 80 to 90% of the items were finalised but, still people want to know what exactly is going to happen from July 1, 2017. So, let us discuss all these things in more details:
First of all what is GST?
GST stands for Goods and Services Tax (GST). It is one of biggest change in the tax systems of India. Government’s aim behind implementing this tax system is to apply a uniform tax by merging many individually applied taxes.
Here is the list of items which are going to be affected by the GST law under various GST tax slabs:
Smart Phones- Currently, approximately 13.5% tax is applied on smart phones including excise duty and VAT. But after GST it will be 12%. The scene is opposite for mobile services, current service tax rate including cess is 15% but after GST, tax rate on mobile services is set at 18%.
Cement- Currently 31% tax is imposed on one cement bag but it will be under 28% in GST. So, GST will bring good news for those who are planning to do some construction work which needs cement.
Medicines and medical instruments- 12% tax will be imposed on Ayurveda and other medicines which is 1% less than the current tax.
No tax will be on materials used in spiritual activities such as pooja, so hopefully these are going to be cheaper.
Tax on Entertainment programmes , Cable and DTH is kept under 28% category including state tax. Currently up to 100% tax is imposed by states for showing movies in Cinema Halls.
18% GST rate is applied on events like Circus, Indian classical Dance, Folk dance and dramas.
Good news for tea lovers, only 5% tax will be applied on Tea leaf after first July. So this daily use item will become cheaper under GST. Currently the tax is 18%.
GST rate on Cars:
Small petrol cars: 29 %( Currently it is 31.5%)
Medium size cars: 31% (Currently it is 49%)
Below items will become more costly as tax rate is increased from 15% to 18%:
Hair oil, Soap, toothpaste, ice cream, instant food, diabetic food, nicotine gum, mineral water, hair oil, cotton pillow, registers, account books, fountain pen, napkin, Tissue paper, toilet paper, cameras, speakers, plastic products, helmets, pipe, sheet, pesticides, bio-diesel, plastic tubes, ceramic-porcelain-china made home use items, bottles-jars-utensils made of glass, steel bars-angles-tube-pipe-nut-bolts, LPG stoves, electronic motor and generator, optical fiber.
These items will cost you more as tax changed from 15% to 28%:
TV, refrigerators, custard powder, coffee, chocolate, perfume, shampoo, beauty and makeup material, deodorants, cream, powder, ski products, sun screen lotions, manicure/pedicure products, shaving creams, razor, aftershave, liquid soap, detergent, washing machines, vacuum cleanser, dish washer, electric heater, electric hot plate, printer, photocopy, fax machine, leather product, vig, watches, video games consoles, cement, tyres of cars, buses and trucks, lamp, light lightings.
12% taxable items:
Dry fruit, butter oil, ghee, fruits and vegetables juice, soya milk juice, milk added drinks, candles, tooth powder, sewing machine and its needles, bio-gas, exercise book, crafting paper, paper box, children drawings, color book, printed cards, lens, pencil sharpener, kitchen knife, LED lights, kitchen and toilet ceramic items, steel, copper, aluminum utensils, electric vehicles, cycle and its parts, playing material, toy car-scooter-cycle, art work, marble/granite block, umbrella, walking stick, comb.
Frozen meat products, butter, packaged dry fruits, animal fat, saus, fruit juice, ayurvedic medicines, and milk powder.
Items with 18%
Flavored refined sugar, pasta, corn flakes, cakes and pastries, preserved vegetables, jam, soup, ice cream, mineral water, carry bags, notebooks, steel products,
These items will be having maximum tax of 28%:
Chewing gum, cocoa free chocolate, pan masala, paint, deodorant, shaving creams, hair shampoo, die, sunscreen, wallpaper, ceramic tiles, water heater, dish bar, sewing machine, washing machine, ATM, wending machine, vacuum cleaner, shavers, hair clippers, automobiles, motorcycle, personal use of Aircraft. All these items are considered luxurious by the government and that is why maximum tax 28% will be applied on it after 1st July, 2017.
Source: ABP News