If you thought that GST will save a hole in your pockets, sorry! If recent reports are to be believed, phone, credit card bills and the insurance premium bills will dig a bigger hole in your pockets.
Post GST rollout on July 1, tax levies on most services will surge higher from 15% to 18%. To update the public in advance, banks, hotels and telecom operators have sent correspondence emails/texts to customers regarding the expected rise in prices after GST rollout.
According to reports, several telecom companies have said that monthly bills will go up as the gains from input tax credit will not be significant. The only exception is state-owned Bharat Sanchar Nigam Ltd. Since these services will not get much input credit, the end-user will have to bear the burden of hiked rates.
What do companies say?
Several telecom companies have downsized the importance of Input tax credit. They said that for services which have insignificant input tax credit, the customer will bear the brunt of higher price. Only a handful of life policies will be covered under the ambit of GST.
In addition to expected rise in insurance schemes, hotel stays and mobile payments will also become costlier.
Want to chill at AC restaurants, pay 16% extra
As far as eating at restaurants are considered, you will be better off if you can manage with a non-AC category eateries which will charge a 12% tax rate. However, for many, AC restaurants are a mandate. The AC restaurants will attract a higher tax slab of 28% post-GST.
A levy of 2.25 per cent is expected after premium payment for the endowment policy, after GST rollout. However, a lower rate of 1.88% is prevalent in today’s time.