12.3 million registered GST tax payers heaved a sigh of relief this year. They had to fill close to 495 tax forms under as many as 17 central and state laws before the introduction of the Goods and Services Tax (GST) in 2017(1). Guess what’s the number now? A meagre 12! But what has been the impact of GST on your life?
Fewer forms reduce the cost of logistics of a business. This along with rate cuts under the indirect tax regime has ensured that prices stay low and inflation is under control. India has been able to reduce its logistics cost from 14% before 2017 to about 10 to 12% today due to the implementation of GST. However, with the ongoing credit crunch keeping businesses in a fix, you need additional financing for your business.
So, have the prices of household goods and services reduced as an after effect of GST or have they gone up the wall? Let us take a look.
Morning breakfast in the Mehra house was incomplete without butter. After all everyone loved their favourite buttered toast with a cup of hot tea. So when Mrs. Mehra saw that there was no butter at home she made a trip to her local supermarket promptly. She was surprised to find it pricier than before.
This is because butter, ghee, cheese, packaged dry fruits and packaged chicken are now taxed double at 12% instead of 6 % earlier. However, the overall impact of GST on food items has been positive.
No tax is applicable on fresh meat, fish, chicken, eggs, milk, buttermilk, curd, natural honey, fresh fruits and vegetables, flour, besan, bread and salt. There has been a marginal reduction in tax rate from 6 % to 5 % on packaged tea and coffee, edible oil, packed paneer, branded namkeen, frozen vegetables etc. Chocolates, chewing gum and corn flakes are also cheaper due to the impact of GST, taxed at 18 % as opposed to 26 % earlier.
If you like to whip up desserts using condensed milk, you might have to shell out more. Along with flavoured refined sugar, pasta, Curry paste, mayonnaise and salad dressings, mixed condiments and mixed seasonings, jams, sauces, soups etc were put under the 18 % tax bracket after the implementation of GST.
Cosmetics and consumables
Washing powder, soap, toothpaste, hair oil, shampoos, hair creams, shaving cream, deodorants, perfumes and beauty products now cost less. These have been moved to the 18% tax bracket from 28% as an effect of GST. Allopathic medicines are still taxed at 12%, which includes 6% VAT plus 6% service tax. However if you opt for alternative medicine such as ayurveda, unani, siddha and homeopathy, you can save more. This is because they are taxed at just 5%.
If you are planning to buy a LCD television, prepare to pay a 28% tax as an effect of GST alongwith its price. This applies to other household electronic appliances like fridge, washing machine, vacuum cleaner which are clubbed in this highest tax slab making them a luxury. An increase in inflation is expected to increase the prices of these gadgets even more.
You might have had to turn back to the simple pleasures of a home cooked meal had the tax on fine dining in air-conditioned restaurants not been reduced from 18% to 5%. This was done after an outcry from both the industry and consumers.
You might be noticing the effect of GST on your mobile phone bills already. GST on telecom services was increased to 18% from an earlier rate of 15%.
If you are eligible for GST, you should also know about eway bill, which is used for transporting of goods and can save tax on it. Read more about GST eway bill only at Finserv MARKETS
Middle class Indians fly economy and so they don’t need to worry. However, if you are a jet setting executive who flies business class for meetings and conferences frequently, your flight ticket just got dearer after the implementation of GST. While tax on airline transport was reduced by 1% to 5% for economy class, it was hiked by 3% to 12% for those who travel in business class.
Life after GST has been a mixed bag of delights and surprises. If you are running a business, your GST return could get you a business loan of upto Rs 30 lakhs available on Finserv MARKETS.
The funds are credited into your account after submission of a few necessary documents. You don’t have to pay any mortgage to avail the loans. So whether, you are facing a financial crunch in your business or want to scale it up further, this financing solution available on Finserv MARKETS is the answer to all your needs. Read more on what are the benefits of taking a business loan and also the components of GST only at Finserv MARKETS.
“Finserv MARKETS, a subsidiary of Bajaj Finserv, is a one-stop digital marketplace that has been created for consumers on the go. It offers 500+ financial and lifestyle products, all at one place. At Finserv MARKETS, we understand that every individual is different. And that’s why we have invested in creating a proposition – Offers You Value. A value proposition that ensures you get offers which are tailor made for you. We also offer an amazing product range and unique set of online offers across Loans, Insurance, Investment, Payments and an exclusive EMI store. Be it in helping you achieve your financial life goals or offering you the latest gadgets, we strive to offer what you are looking for. From simple and fast loan application processes to seamless and hassle-free claim-settlements, from no cost EMIs to 4 hours product delivery, we works towards fulfilling all your personal and financial needs . What’s more! Now enjoy the same benefits in just one click with our Finserv MARKETS App.” 1.