Roll out of GST, how it impacts on a common man and the things we must know are going to be discussed here. Keep your eye on this article to get an overall impact of this GST scheme.
When GST got rolled up, the prices were expected to go down and the consumers get more benefits. But that would happen only in the long run in the form of input tax credits that start coming back to the consumer along with the reduction and prevention of the cascading effect. This would happen once the traders and the businesses adopt the GST regime completely. But the impacts on GST is more and one of the reasons is transparency.
There has been much evident technological transition since decades. Today the needs of a common man have been changed. After the biggest reform introduced in the history of India, the common perception towards GST was the prices will be lower than before. But, the reality has been totally different.
The incorporation of all taxes into one tax which is called as GST that impacted us all, especially the common man, some goods and services are exempted from GST but the other services and products attract a rate as high as 18%.
The taxes which are levied on services have been increased to 3%. Under the GST regime, the services have come up to 18%, which clearly implies that the price of services got increased.
Some of the luxury items that we avail, not regularly but occasionally are:-
As of now, there is no significant impact of GST. In earlier the restaurant charged 12.5% GST along with the service tax of 6% i.e. 18.5%. Under GST, AC restaurant charging as 18% and a Non-AC restaurant is charging as 12%.
High tier hotels having a tariff above 7500 per night become more expensive under GST, it attracts a tax rate of 28%, which was charged earlier in the range from 19-25%. Normally the tariff ranges between 1000-2500 are subjected to GST at the rate of 12% and between 2500-7500 are subjected to GST at the rate of 18%.
Banking and insurance:
The tax, which is levied on these services has been increased from 15% to 18%. This is the service which every person can avail and that can’t be done away with.
In this service sector, it can be divided into two parts. One is economy class which the service tax regime taxed in the earlier system is 6%, but now under GST it has been decreased as 5%. In business class, the earlier system levied a tax at the rate of 9%, but now it is charged a tax of 12%. Thus, it is considerably a big impact for the business class people.
Services such as Ola, Uber have become the major part of our life and under GST it comes as a relief because it has been reduced by 1%. In the earlier system, it has been charged at a rate of 6% tax now under GST it got reduced and charged at the rate of 5%.
Household items and other things:
Other household expenses, food items and certain packed foods or FMCG (Frequently Movable Consumer goods). Food items are subjected to 0-5% GST and FMCG goods like soaps, shampoos and certain electronic items like TV, Coolers, becomes little less expensive.
GST motive is to bring more transparency and preventing the corruption. It also improves the compliance and thus it changes the old taxation system which is a production based to the new consumption based one.
GST provides the biggest opportunity for a lot of international brands to look at India. It’s not only to showcase as a big consumption market, but also as “level playing field”. Government has been supportive in order to regularise the trade.
Thus this impacts would change into benefits in the long run. Initially impacts will be in all over the places because the price fluctuation is considerably more. But GST is the greatest boon to the nation in terms of market and economical growth of the country.
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