As soon as the GST came into effect, it would not be wrong to say that this revolutionary move had impacted the lives of many. In fact, people are still struggling to understand what actually GST is all about. Moreover, for them, the picture is still not clear as what would be the GST impact on common man and how it is bringing changes in the Indian economy. So, just to give you a sneak peek, we are here to help. All you need to do is just read this article further.
Just in case if you don’t know what Goods and Services Tax is, it is country’s most informative taxation reform after independence, which was introduced to replace multiple taxes levied by state and central government. The idea to implement this indirect tax was first proposed in the budget of 2007-2008 by then Union Finance Minister.
However, after continuous pondering and redesigning, the bill had finally came out into the action on July 1, 2017. Well, the main endeavor of launching this bill was not only to replace the taxes but to make India the biggest and democratic and free market, ultimately changing the way India pays its taxes.
Read Also: Analysis of GST Impact on Personal Loan
Under its four different tax slabs of 5%, 12%, 18% and 28%, there is no denying the fact that this unified tax regime has impacted the life of a common man in many ways. Though some household products and services had seen a price hike, while on the other hand some products and services were unchanged or reduced.
Thus, all in all, GST launch had witnessed the mixed reaction of people. However, to be more specific, and to give you a better clarity on the same, below we have prepared a list, showing the products and services falling under different tax slabs.
Goods: milk, fruits, vegetables, bread, salt, bindi, curd, sindoor, natural honey, bangles, handloom, besan, flour, eggs, stamps, printed books, judicial papers, and newspapers.
Services: Hotels and lodges, carrying a tariff below ₹ 1,000 are exempted.
Tax Slab of 5%
Goods:Skimmed milk powder, fish fillet, frozen vegetables, coffee, coal, fertilizers, tea, spices, pizza bread, kerosene, medicines, agarbatti, insulin, cashew nuts, lifeboats etc,
Services: Small restaurants along with transport services like railways and airways
Tax Slab 12%
Goods: Frozen meat products, butter, cheese, ghee, pickles, Ayurvedic medicines, sausage, fruit juices, bhujia namkeen, tooth powder, umbrella, instant food mix, cell phones, sewing machine etc.
Services:All Non-AC hotels and business class air tickets
Tax Slab 18%
Goods:Flavored refined sugar, cornflakes, pasta, pastries and cakes, preserved vegetables, tractors, ice cream, sauces, soups and mineral water.
Services: AC hotels which serve liquor, IT and Telecom services and financial services along with branded garments.
Tax Slab 28%
Goods: Deodorants, chewing gum, hair shampoo, sunscreen, pan masala, dishwasher, weighing machine, vacuum cleaner. Other items include shavers, automobiles, hair clippers, motorcycles.
Services: Five-star hotels, racing, movie tickets and betting on casinos and racing
Let’s just give you more detailed information on this topic in the article below…
- You can expect to have cheap restaurant bills. Yes, suppose, earlier on a bill of ₹1,000, the tax levied on you was about 18.5% including the service tax, making you pay a total of ₹1,185. But after the implementation of GST, the rates are now fixed at a constant of 18%, making you pay a total of ₹1,180 for the same order.
- An escalation in phone bills is something which came into effect soon after the roll out of this indirect tax. Earlier, the users need to pay a tax of 15%, but after this reform, the tax levied on customers is 18% , which automatically have risen the rates of phone calls and internet usage.
- Readymade garments are cheaper now all thanks to GST. As earlier, suppose on a readymade garment of worth ₹1,000, the tax of 12.5% was levied. But now on that same pricing, 12% tax will be levied, thus making the garments total cost cheaper.
Well, with all these facts stated above, there is no denying the fact the GST impact on common man looks like a mixed kitty, making few things cheaper and some costlier.