Impact Of GST- What Goes Up And What Goes Down
Free 824 words essay on impact Of GST- What Goes Up And What Goes Down for school and college student.
Putting an end to everyone’s long wait GST, the Goods and Service Tax will be rolled out on the 1st of July after the delay of three months from the originally proposed date. By merging the centre and state taxes, the concept of one tax, one nation will be served well. There are many questions that needs clear answers. Like the prices of which segments will be impacted and how it will affect our lives. Also, the nation has been questioning that whether the GST will be a game changer or a mere firework for one night. Let’s get to know the bill a little more closely.
The Rate Slab:
- No tax on items like dairy, meat and poultry products, natural honey, fresh vegetables and fruits, bread, flour, besan, bindi, sindoor, bangles, prasad, salt, bangles, handlooms, newspapers, printed books, stamps, judicial papers etc. These are the essential items that constitute roughly half of the consumer inflation basket.
- 5% tax on cream, skimmed milk powder, fish fillet, frozen vegetables, branded paneer, pizza bread, rusk, sabudana, tea, coffee, kerosene, coal, medicines, stents, lifeboats etc. These are the items of common use.
- 12% tax slab constitutes items like butter, cheese, ghee, frozen meat products, packaged dry fruits, namkeen and bhujia, sausages made from animal fats, Ayurvedic medicines, colouring and picture books, tooth powder, incense sticks, mobile phones, sewing machines, umbrellas etc. These are the items of bulk goods and services, including FMCG.
- The tax slab of 18% contains items such as flavoured refined sugar, pastries and cakes, cornflakes, pastas, jams, soups, sauces, preserved vegetables, ice cream, ready to make food items, tissues, mineral water, tampons, steel items, notebooks, camera, monitors, speakers etc. These are also the bulk goods and services items, including FMCG.
- The highest slab of tax in 28% that includes cocoa free chocolates, molasses, chewing gum, chocolate coated wafers, waffles, paint, aerated water, pan masala, shaving creams, aftershave lotions, deodorants, shampoo, sunscreen, dye, water heater, ceramic tiles, wallpapers, washing machine, weighing machine, dishwasher, ATM and vending machines, shavers, vacuum cleaners, hair clippers, automobiles, motorbikes, yacht, aircrafts for personal use etc. These are the items of ultra luxury, demerit and sin goods.
GST Will Replace These Taxes:
- Central Excise Duty
- Countervailing Duty
- Service Tax
- Luxury Tax
- Purchase Tax
- Entertainment Tax
- Entry Tax
- Advertisement Taxes
- Tax on lotteries
The Impact on Prices
Items To Become Costlier:
- Cigarette prices will be going up since the price of tobacco will be higher in GST than the current duties.
- Commercial vehicles will turn costlier.
- Mobile bills will cost more.
- The price of branded jewelleries and textiles will go up.
- Premium for renewing the insurance policies.
- Services of Banking and investment services will cost more now.
- Services of DTH, WIFI and booking the tickets online will see hike in prices.
- Residential rent will rise
- Prices of health care will go up.
- School fees will go up.
- Courier services will be costlier.
- Commuting through rail or metro will be more expensive.
- Dining out will be more expensive.
- Super luxury products, sin goods and demerit goods will see a lot of price hike.
Items To Become Cheaper:
- Air conditioner, now taxed at 32% will be in 28% tax slab.
- Toothpaste, hair oil and soap will fall under 18% tax slab instead of 28% as they are taxed now.
- Cereals are exempted from the previous 5%.
- Prices of Car batteries will fall.
- Prices of cement and paint will decline likely.
- Movie tickets will come a little cheap.
- Electronic items like lights, fans, water heater, air coolers will also witness decline in price.
Cars and white goods remain marginally affected by GST.
Lending A Helping Hand To Consumers
We, the consumers, have no idea about how much taxes we are paying on the goods. The VAT mentioned in the bill is just an understatement of the taxes we have paid on that same good. The excise duty collected by central government and the various other taxes levied on that product is already added in its price with the additional of VAT. To just assume, we pay over 20% of tax on one product. GST will benefit the consumers in two ways. Firstly, the tax will be collected at the point of consumption under GST. That means a good taxed at say 15% will include the taxes of both the central and state government. The transparency in taxes will prevent government from increasing the taxes. And secondly, the consumers will not have to pay tax on tax once the barriers between states are lifted. Hence, you will know how much you are paying in all.
Making an opinion on the bill just now will not be an intelligent thing to do. It looks promising but it will be better to wait and watch it unfold. The way it takes will give a sneak peek into the future that GST holds.