Goods And Services Tax is lurking around the corner and the uncertainty and apprehensions are giving jitters to everyone. Undoubtedly, the simplified GST has made “More to Less” and its innumerable benefits has introduced “Less to More”. Let’s have a look at both sides of the coin.
Here’s how its ‘More to Less’
- Single tax to replace multiple levies
- Single tax levied on goods & services both
- Automated processes to reduce human interface & chances of error
- Reduced cost of compliance for tax payers
- Lesser logistics and inventory costs
And, how ‘Less to More’
- Increased economic activity and investment
- Boost to ‘Make in India’ initiative
- Generation of employment
- Efficient neutralization of taxes to make our exports competitive
And, now! This much-awaited GST regime is one step closer to reality. So, if you are also worried about your pockets and wondering how GST will affect your everyday life, here is a look:
Things that may become cheaper*
- Fans, air coolers, lighting, water heaters, LED TVs, mobile phones and other electronic items
- FMCG goods such as shampoos, over-the-counter drugs, processed foods, chocolates, etc.
- Pharma products
- Readymade clothes, including branded apparel
- Movie tickets (due to reduction in entertainment tax)
- Two-wheelers, entry-level cars and SUVs
- Cement, paint and other construction material
- Solar panels, Point of Sale (PoS) machines and fingerprint scanners
Things that may become costlier*
- Hotel and restaurant bills
- Mobile bills and internet packs
- Jewellery and high-end accessories
- Rail transportation, air travel and rent-a-cab services
- DTH, cable TV and courier services
- Luxury cars
- Tobacco/Cigarettes
- Aerated drinks
- Insurance Premiums
- Online Shopping (however, this is expected to be balanced by lower costs of logistics and smoother inter-state transport because of a uniform tax rate)
Long story short…
GST is a mixed bag with certain commodities getting cheaper, while certain costlier. Also, the GST rates depend on the person using the commodities. The proposed rates are:
| Slabs | New GST Rates | Current Rates | Products |
|---|---|---|---|
| 1 | 5% | Upto 9% | Edible oil, tea, coffee, spices |
| 2 | 12% | 9%-15% | Computers, Processed Food |
| 3 | 18% | 15%-21% | Soaps, Shampoos, Hair oil, Shaving Creams etc. |
| 4 | 28% | 21% | Luxury Goods (Additional cess of upto 15 % may be put on luxury cars, tobacco, aerated drinks) |
*Source: https://www.thebetterindia.com/93651/cheaper-costlier-impact-gst-tax-india-common-man/
GST is not a threat to your business or to your wallet. It’s just a unification, digitalization and simplification of the existing tax system. With the passage of the GST Bill in parliament, the July GST deadline is quite in sight now. And, businesses should immediately start focusing on its preparation and implementation.
To know how to realize a smoother transition to GST, contact us at: BatchMaster ERP
