The Indian indirect tax system is ready for a revamp with GST Rates in India all set for a roll- out on July 1 but the apprehension and confusion is evident among the aam janta, despite the rosy picture painted by the central government on the numerous benefits of the GST model. While on paper the benefits are alluring, the on-ground implementation is sure to have its share of hiccups and inconvenience especially to the business class. But eventually, the GST model of taxation is aimed at easing the flow of goods and services through the country and also aids the ease of doing business in India which pre-GST was flooded with indirect taxes in the form of excise, VAT, service tax, entertainment tax, Octroi, cesses, surcharges – the works.
In this write-up, we bring to you the list of commodities that you as a consumer can expect to experience a price change in.
DOMESTIC APPLIANCES: Average total tax including local taxes came up to 25-26%. The government has now placed items like fridge, washing machine, vaccum cleaner in the 28% tax bracket. So this additional tax burden on the consumer is likely to make these electronic household appliances cost more.
AIR FARES: Economy Class fares are likely to come down while Business class fares will experience a marginal increase. But, this is unlikely to affect the pockets of those who prefer to travel in business class as the increase in fares will be minor. Also, there have been reports that the benefit of drop in economy ticket prices might not eventually come to the consumer, as Airline Companies plan on increasing the prices to cover the additonal GST costs being borne by them.
BUDGET HOTELS AND RESTAURANTS: Restaurants without AC and liquor license come under the 12% GST category where as AC restaurants serving alcohol come under 18% tax rate. Five star hotels to attract 28% tax. Owing to the current high rates of VAT and Service tax, these experiences will cost marginally lower.
MOBILE AND INTERNET BILLS : With telecom services coming under the 18% bracket compared to the 15% service tax being levied so far, be prepared to shell out more money on mobile and internet bills.
FOODGRAINS: Unprocessed fruits and vegetables fall under the 0% category which will prove good for the agriculture industry, where as preserved food items, dry fruits, jams, aerated drinks etc are likely to cost more owing to them falling under the 18% category now.
So, while GST history in other countries tells us that the initial jolt to prices eventually normalizes, here is hoping the ‘One nation one tax’ system proves fruitful to everybody.