The goods and services tax popularly called GST will be rolled out across India on the midnight of June 30th. This is India's biggest tax reform since Independence and a game changer in the economy. The Prime Minister Narendra Modi is keen to ensure a seamless transition to GST. GST will help the Government collect more taxes, bring down inflation and speed up growth in the economy.
Just take a look at the number of lorries stuck in border crossings. Lorry drivers lose more than 60% of transit time at road blocks, tolls and at state borders. This pushes up logistics costs to more than 3 times, compared to International markets.
Then...bribes. If you have to roll your truck into another State and even if your documents/papers are in order, you still have to pay a bribe or risk heavy penalties from factories whose raw materials are stuck at borders for days. All this will stop once GST is in place. This is a single indirect tax which will replace multiple state and central taxes. 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.
India under GST has a four-tier tax structure of 5%, 12%, 18% and 28%.
No tax will be charged on milk, flour, eggs, fish, chicken, fresh meat, bread, salt, fresh fruits and vegetables, curd and buttermilk, jute, stamps and judicial papers, newspapers and printed books, hulled cereal grains, palmyra jaggery, natural honey, bangles, human hair, besan, prasad, bindi, sindoor and children's picture/coloring books.
Many of this items and products are used by the common man. If the prices of these items increase, it will fuel inflation in India. The Government has very smartly slotted these items in the no tax (0%) category. This will help control inflation in the economy.
Items like skimmed milk powder, branded paneer, cream, frozen vegetables, edible oil, tea and coffee, spices, indian mithai, pizza bread, rusk, kerosene, coal, sabudana, lifeboats, stents, fish fillet, apparel below Rs 1000, packaged food items, cashew nut, cashew nuts in shell, footwear below Rs 500, raisin, ice and snow, insulin, agarbatti, bio-gas, kites and revenue stamps fall in this bracket.
If you look carefully at these items, you will find a lot of them are consumed by you and other middle class citizens. By slotting these items under the GST 5% slab, the Government is making sure inflation stays low.
Items in this category include frozen meat products, butter, cheese, ghee, packaged dry fruits, sausage, fruit juices, namkeen, umbrella, sewing machine, cellphones, spoons, forks, ladles, skimmers, fish knives, cake servers, board games like ludo, playing cards, spectacles, ayurvedic medicines, carom and chess boards, tooth powder, note books and apparel above Rs 1000.
Take a close look at this slab. You will find a lot of items like biscuits, refined sugar, cornflakes, pasta, pastries, cakes, preserved vegetables, jams, sauces, soups, ice cream, instant food mixes, tissues, envelopes, steel products, note books, PCB, CCTV, optical fibre, camera, bamboo furniture, swimming pools, curry paste, printers, mayonnaise, mixed condiments, salad dressings, mixed seasonings, weighing machinery, aluminum foil, speakers, monitors and mineral water in this slab.
Let's take a look at the items which fall in this tax bracket. Chewing gum, bidis, waffles, wafers with chocolate coating, hair shampoo, dye, ATM, vending machines, motorcycles, hair clippers, automobiles, shavers, vacuum cleaners, chocolate without cocoa, molasses, pan masala, aerated water, paint, deodorants, after shave, shaving cream, wallpaper, sunscreen, ceramic tiles, water heater, aircraft for personal use and dish washers fall in this slab.
It's time to get ready for GST. With around a week left for this game changer, pull up your socks and take a look at the GST slabs and the items which fall under them. Be Wise, Get Rich.
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