Your big day is a little over a month away. No, I am not talking of your wedding. I am talking about the Goods and Services Tax, popularly known as GST. As the Government races to meet the July 1st deadline for the implementation of GST, expect some mega changes in your life.
Rates of more than 500 services and 1200 goods which is 80-90% of all items, were slotted into GST's four-fold tax structure. Take a look at the GST tax slabs. (0%, 5%, 12%, 18% and 28%). Now to the most important discussion, How will GST impact your family budget? You must be keen to know what gets costly and what gets cheap. If you are from a middle-class family, this discussion is even more important.
Let's take a quick look at some of the products and services which will be cheaper and those which will get costly, after the implementation of GST. Want to know more on tax planning? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice / education to ensure that you are not mis-guided while buying any kind of financial products.
GST is great news for the common man. Items you consume daily like milk, vegetables, chicken, eggs, fruits, curd, natural honey, bread, foodgrains, jaggery and cereals have been exempted from tax. They fall in the 0% slab.
What about the hot cup of tea you sip with a little sugar each morning? That's getting cheap. There's more good news coming. Tea, Coffee, edible oil, Spices, Skimmed milk powder, pizza bread, rusk, kerosene, coal, medicines, fish fillet and branded paneer fall in the 5% tax bracket. These products will attract a tax of just 5%.
The Government is very serious on keeping inflation low. Don't you think putting most of the essential items used by the common man in the 0% and 5% GST tax bracket will make sure inflation stays low?
You love flying? Make sure you buy flight tickets in the economy class. Economy class air travel will be cheaper after GST. Economy class air tickets will attract a GST tax of 5% from the current 6%. So, buckle your seatbelt and get ready to fly.
The Government wants the common man to fly. The Government has launched the UDAN (Ude Desh Ka Aam Nagarik) Scheme, in which you can book a airline seat for as low as INR 2,500. Airfare for a 1 hour journey (around 500 Kms) on a fixed wing aircraft will be capped at INR 2,500. Don't you think GST can make this dream a reality?
Your transport woes are soon about to end. Non AC rail travel will be tax exempt under GST, while AC rail travel will attract a 5% tax rate.You love taking out your smart phone and booking your cab ride with a cab aggregator like Ola and Uber? Your cab ride just got cheap. Cab aggregators currently pay tax at 6%. After GST, it will be just 5%.
Time to get that smart phone and book your cab ride?
Multiplex operators are very disappointed with the GST rate for cinemas. The Finance Minister Arun Jaitley has fixed the GST rate on movie tickets at 28%. This is a very high tax rate, which is applicable on casinos and five-star hotels.
This is what the Finance Minister had to say on the GST rate for cinemas. Cinema halls currently pay a service tax of 15% + state entertainment tax. The state entertainment tax is around 28-100%. All these taxes will be absorbed under the 28% GST rate.
Multiplex operators believe that a lower GST rate would make watching movies more affordable. Multiplex operators are shocked to find the Government classifying watching movies as a luxury.
You love buying smart phones and talking on your phone to friends and family? After July 1st you are bound to feel a little disappointed. After GST you will have to spend more on buying smart phones and your phone bill will definitely shoot up.
The tax rate on telecom services will go up from 15% to 18% after the implementation of GST. Yes, telecom services fall in the 18% tax bracket.
Smart phones and mobile phones, especially the Made in India variety, will be costly after GST. These locally manufactured devices will soon be more expensive as they currently enjoy tax benefits for local manufacturing. After GST locally manufactured smart phones and mobile phones will fall in the 12% GST tax bracket.
You want to buy a desktop or a laptop after July 1st. You are in for a nasty shock. Laptops and desktops are currently taxed at 14-15%. After GST, desktops and laptops will be taxed at 18%. Better buy that laptop before its price shoots up.
GST will be implemented on July 1st. GST could bring down inflation in India. GST is a game changer. Be Wise, Get Rich.
The research team at IndianMoney.com comprises of certified and experienced professionals who share the company's vision to make every Indian financially literate by equipping every Indian with right and unbiased advice. IndianMoney.com research team provides newsletters, articles, videos and FAQs on various financial products and concepts only to help you make wise financial decisions.
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