Everyone is talking about it. Come July 1, 2017, India will finally implement the much awaited Goods GST has turned out to be a major game changer for our tax structure as it will replace all the indirect taxes levied by our State and Central governments.
The country will witness the biggest tax reform after independence and there is no doubt that there is going to be a reverberating impact on various industries and customers. GST tax rates consist of a four slab structure and all the goods and services will be taxed at 5%, 12%, 18% or 28%. As a matter of fact, most of the goods and services have been taxed at 18%.
Education and healthcare have been exempted from the GST tax list and therefore both these sectors won’t witness any impact. All said and done, the major point which is in everyone’s mind is- ‘ How will GST impact the common man’s pocket?’. Every common man had high expectations from our Finance Minister Arun Jaitley and it’s time to examine whether he exceeded our expectations or not.
If you can’t resist yourself from buying branded clothes, then there’s a good news for you. Buying your favorite branded clothing is going to get cheaper as under GST they will be taxed at 18%. At present, the tax rates for the same is around 23-24%. This is definitely going to incite the shopaholic inside you.
This is a blockbuster news for all the travellers who have to pay a large sum of money to hotels as tax. Only the hotels which charge a tariff of more than Rs. 5,000 will be taxed at 28%. The hotels with tariff between Rs. 1,000 to Rs, 2,500 and Rs. 2501 to Rs. 4,999 will be taxed at 12% and 18% respectively. The best part is there is no taxation for hotels with tariff below Rs. 1,000. So you can now enjoy your travel even more.
Travelling via airways is going to cost less to the common man as the taxation on economy class under GST has been kept at 5%. Currently, the tax rates for the stand stands at 6%. So just in case you were postponing your air travel due to the high rates, you can now plan for it after July 1.
GST has brought smiles on the faces of people who have a lifelong dream of buying their favorite luxury car. It’s the best time to purchase a Jaguar Land Rover or Mercedes Benz CLA has the tax rates plus cess on the same have been slashed to 42-45%. Leading car manufacturers have already started passing on the benefits to the customers.
The cab rides are all set to get marginally cheaper once GST is implemented from next month. The tax levied on cab aggregators will come down to 5% from the present 6% thereby making travelling cheaper. So the next time you want to go somewhere, you can easily give the public transport a miss and instead hire a cab.
Personal care products like soaps, toothpaste and hair oils are used on a daily basis and they must be taxed at an affordable rate. Under GST they have been taxed at 18% down from the current 24-28%. This is definitely a good piece of news for the common man.
In case, you are planning to buy gold ornaments for your daughter’s wedding, then you will have to shell out more from your pocket. GST tax rates for gold has kept 3% up from the present 2%. This is not a so good news for all the women of the country who are eagerly looking to buy gold during Dhanteras.
Buying a new television or refrigerator or washing machine will cost you more after GST is rolled out. The reason being that consumer durables and home appliances are taxed at 28% under GST, up from the current 24%. So just in case you were planning to get rid of your old television set and replace it with a 32 inch LED, be ready to shell out some extra bucks.
Author Bio: Abhishek Ranjit is a content writer who is very much fascinated with the world of finance. Currently the topic of GST is trending and he has written quite a few articles on the same. This particular article will throw light on the impact of GST on a common man's pocket.