After the celebrated announcement of a single Goods and Service taxes (GST) for the country, people are still grappling to understand it better. You can ask a simple question- “Will GST bring down the prices?” Unfortunately the answer to this question is not a simple “yes” or “no”. Some prices may go down and some might go high and it is dependent on various factors. So as the Prime Minister announced GST will look a trifle difficult to understand but in a few days time the process will sink and it will be a part of our life. It will definitely put a check on corruption. Maybe it will be a “Good and Simple Tax” after all.
As we understand it at the first look, almost 17 multiple taxes were levied on goods and services by the centre and the state. Now all this is rolled into one. GST has been fixed for more than 1000 items. Most products fall into the 12% to 18% slab. So a product or service is charged the same all over India creating a unified market. Business is made simpler and there will be a decrease in the production cost. The government is expecting that the benefits be passed on to the consumer. In most countries there is only one slab. In India in this GST four slabs are there taking into consideration the diversity in the income of India. People in the lower bracket will be most benefitted and luxurious goods and services will have tax hike.
Monthly and annual premium on insurances will increase, as will the service charge on mutual funds. Bank charges, loan processing charges will increase. So also the brokerage of the stockbroker can increase. Service tax on credit card will go up and more so if there is a penalty for non-payment. Coming to goods, food items like jam and cornflakes will cost more. Leather bags, shoes more than ₹ 500, small cars, watch, shampoo, perfume, Television and AC will have a higher rate of GST. Keep in mind that salon visits or hostels costing more the ₹7500 will be costlier now. Mobiles, DSLR camera will cost more. On the brighter side, soaps, hair oil, biscuits, plastic kitchenware, pressure cooker, garment below ₹1000, cell phones are going to have a lesser GST. Fertilizers and tractor parts will cost less. And in the transport section, big cars and economy air tickets will cost less. As days go by more goods and services will be added to the list and a comprehensive list will be available as a ready- reckoner.