Goods and Services Tax (GST), A new tax system to introduce in India from the next financial year. Common individual doesn’t know anything about GST and it’s impact on their pocket. Check out the various ways, the most trans formative tax reform in India is likely to affect in the common man.
GST is basically the unification of tax system for the nation which helps in boosting the Gross Domestic Product ( GDP) by 2 per cent overall.
So how does GST impact on common man saving? Check out how this tax legislation will impact your household budget.
Restaurant and Hotels Bills – Eating Out Expensive
Currently eating out service tax with VAT varies from 18.5% to 27 % in different states which will be dearer by 20% to 30%.
Suppose for eating out, if you spend Rs 1000. Currently you pay inclusive service Tax and VAT Rs 1185. In GST the rate of service tax wil be fixed at minimum 18% and maximum as per the state. In this case the minimum bill for Rs 1000 will be Rs 1200.
Mobile and Phone Bills
Similarly Mobile and phone bills will be expensive as the minimum tax to be kept in GST is 18% and different states will have their own rate for which no limit defined.
For example current phone bill of Rs 1000 with service tax of 15% is Rs 1150/- will be costlier by minimum of Rs 1180 with minimum 18% tax.
But not everything will be costlier, there are many items which will be cheaper
Ready made Garments and Cloths
Cloths will be cheaper. As in GST the rate is kept at 12% where as currently it is 12.5%. So Rs 1000 shirt today cost Rs 5 lesser after GST implementation.
Buying Car will be Cheaper
Buying car will be cheaper after GST . The current tax structure rate is approx 25% inclusive of VAT and service tax. After GST the tax rate will be 18%.
Beside these the other items which get cheaper after GST are :
- Movie tickets
- Small cars
- Buying a house
- Processed goods
- Mobile phones
- Building materials
List of Items which are costlier After GST:
- IPL & sports events
- Ambulance services
- Cultural programmes
- Restaurant bill
- Mobile phone calls