GST bill : Rates implementation on services and goods

India seems all geared up to witness the dawn of new taxation regime from first day of July and one sixth of humanity is anticipating a brighter tomorrow with the introduction of Goods and services Tax (called GST hereafter). GST may well turn out to be shape shifter for the Indian Economy by deciding the destiny of businesses tax rates in India.Thus, an average Indian is also skeptic of its effect on his platter. While the ruling establishment is pulling no punches in setting claims on a “reform” conceptualized during the opposition’s regime.

Government claims, the new tax rates applied on daily-use household items could bring down Indian mediocre class monthly bill once the GST is in force. It will give relief to the taxpayers and will boost the Indian economy and citizens remain unaware of its cyclo-rama. Hence lets attempt a series of panoramas to gather its functional understanding.

As per Finance Ministry groundnut oil, palm oil, sunflower oil, coconut oil, mustard oil, sugar, palmyra jaggery, sugar confectionery, pasta, spaghetti, macaroni, noodles, fruit and vegetable items, several food products, pickle, murabba and the essential foods such as milk powder, curd, butter milk, unbranded natural honey, dairy spreads, cheese, spices, tea, wheat, rice, flour, and spices are placed in the lower tax bracket.

Products or Services to get expensive after GST :

Mobile Phone Bills

Earlier we were paying 15% service tax on recharge amount and on phone bills but from now on wards tax rate is fixed at 18 %. Like on a bill of Rs 500 consumer pays 15 % as service tax and pays Rs 575 as total amount to his service provider. After GST, you will have to bear the brunt of Rs 590. Internet packs and call rates may also become higher.

Dining Out

Dining out will be expensive. Currently if you are paying about 18.5% as service tax and VAT. But after GST, it is expected that the rates can vary from 18 to 20%.

Banking & Insurance

Services you get from banks are taxed at 14.5% currently which become costly by the rate of 17- 18% after GST

Air tickets

Service tax on airline fares ranges between 6%-9%. GST will push the taxes up further to 15%-17%

Ayurveda

Ayurvedic products become costlier as the government has kept these products in the 12 % bracket. Ayurveda products currently attract with 8-9%.

Gold

Gold is geared up to become SKYHIGH. Currently, only 2% tax is paid by the buyers, but after GST at least 6 % is expected to be paid by buyers. Which is becomes bad news for women.

Rail tickets

GST will not be exceptionally beneficial to train passengers as the effective service rate of rail tickets which was 4.5% will now increase to 5% in GST.

Online Shopping

Don’t expect discounts offer after GST. Online shopping and online ticket booking services become expensive.

Product or Services to become cheaper after GST:

Processed Foods and packed food

Companies manufacturing processed food pay various taxes summing up to 24%-25%. With GST, it’ll sum up to 17%-19%.

Movie Tickets

Entertainment Taxes will provide some relief by 2-4%.

Televisions and washing machine

Television tax will be around 18-20% rather than 24.5%. So LED TV of Rs 20,000 was of Rs 24,900 approximately now it will be around Rs 23,600.

Cement

Tax for cement is 25%. With GST it will become 18%-20%.

Buying a car

The dream of luxury car will now seems reachable for the common man. GST fixed the tax of 18% on car.
Such as, if buyer want to buy a car of Rs.5 lakh car, with excise duty of 12.5 % and with VAT roughly totals to Rs 6.25 lakh. Under the GST, it is expected now to get lower up till Rs 35,000. If the rate is fixed at 18%, the price will now be Rs 5.9 lakhs.

Air Travel

Air travel for economy class will become cheaper with tax rate fixed at 5 % against the existing 6 %.

Ola and uber cabs

Cab rides could get marginally cheaper for customers. The incidence of tax will come down to 5% from 6% for bookings made on cabs.

ITEMS Units Consumed MRP Monthly budget before GST MRP After GST Monthly Budget after GST
Milk 60 45/ltr 2700 45 2,700
Vegetables and Fruits 30 50/kg 1500 50 1500
Bread 10 25/pack 250 25 250
Rice 10 70/kg 700 70 700
Atta 20 30/kg 600 30 600
Pulses 5 110/kg 550 110 550
coffee/Tea 2 150/pack 300 143 286
Packaged chicken 5 350/pack 1750 359 1,795
Edible Oil 4 125/ltr 500 126 505
Masala 0.5 300/kR 150 289 144
Packed curd 5 100/pack 500 92 458
Packed Oancer 2 250/pack 500 240 481
Butter 4 50/pack 200 53 211
Cheese 2 50/pack 100 49 99
Biscuit 15 10/pack 150 9 134
Mithai 2 350/kg 700 337 673
Chocolate 10 20/pack 200 19 187
Corn Flakes 2 150/pack 300 134 268
Ice cream 15 45/pack 675 42 634
Cold drinks 15 20 300 18 269
Juices 15 30/pack 450 29 431
Soap 8 25/pack 200 21 169
Toothpaste 2 60/pack 120 51 102
Hair OiL 2 150/pack 300 127 254
Shampoo 2 250/pack 500 230 460
Face cream 2 300/pack 600 280 561
Medicine 5 100/pack 500 90 449
16,000 15,584