The BIG CHANGE in the Indian taxation system, the GST has been the hot topic for over a month. Today, as we are counting down hours to the final GST rollout, we assume you may be worried about the effect of the biggest tax regime after India’s independence.
The big question is how GST will affect your pockets. While necessity goods will become cheaper, luxury goods will become dearer. As GST has been bifurcated into 5 different tax slabs including 0%, 5%, 12%, 18% and 28%.
Here is a quick checklist for assessing the effect of GST.
Necessity goods like pulses, curd, besan, atta, bread are going to become cheaper. Contrarily, luxury like hotels, restaurants, banking, insurance services will become dearer for Indians.
0% tax rate
Pulses, foodgrains, curd, lassi, atta, maida, besan, salt, unpacked paneer, jaggery, fish, chicken, buttermilk, fruits and vegetables have been exempted under GST.
5% tax rate
- Sugar, tea, edible oils, cream, milk food for babies, spices, pizza bread, packed paneer, frozen vegetables and packaged food items
- Transport services like railways will attract 5% tax rate
- Footwear and clothes up to Rs 500 and Rs 1000 respectively
- Pharmaceuticals (life-saving drugs),
- Cotton and natural fibre
- Small restaurants
- Agarbatti, coir mats, domestic LPG, biogas, matting and floor covering will attract only 5% GST
Here are the items which will attract 12% tax rate
- Clothes above Rs 1000
- Butter, ghee, almonds, fruit juice, bhujia, namkeen, fruit juices, frozen meat products, dry fruits (packaged), tomato sauce
- Business-class air ticket
- Non-AC hotel
- Mobile phones
18 per cent
- Biscuits (all categories), pastries and cakes, soups, mayonnaise and salad dressings, ice cream, pasta, corn flakes, mixed condiments and mixed seasonings
- Personal care items have been bracketed into 18% tax rate, against the earlier 28%. Hence, you are in for big savings on cosmetics.
- Footwear above Rs 500
- Restaurants inside 5-star hotels
- AC hotels that serve liquor and hotels with room tariffs between Rs 2,500 and Rs 7,500 will attract 18 per cent GST
- Computers, camera, printers, speakers and monitors, CCTV will attract an 18% tax rate.
Hotels with room tariffs above Rs 7,500 and 5-star hotels will come under 28 per cent GST
28 per cent
- Chewing gum, molasses, chocolate not containing cocoa, waffles and wafers coated with chocolate
- State-authorised private-run lotteries
- Hotels with room tariffs above Rs 7,500, 5-star hotels
- Race club betting
- Movie tickets above Rs 100
GST will be a landmark reform in the history of India. Not only will it ensure streamlined taxation system, the cascading effect of taxes will be removed entirely from the Indian financial fabric. The countdown to GST is on, as the nation awaits its midnight launch today.