The Goods and Service Tax (GST) is highlighted on each and every day and it is really becoming tedious to understand it. Actually, many people are finding it tough to understand it and it is becoming economic jargon for many of the people. Most of the goods and services have been listed under the four broad tax slabs 5 per cent, 12 per cent, 18 per cent and 28 per cent. 81 per cent items will attract tax of 18 per cent or below, while 19 per cent of items will be taxed at the highest rate of 28 per cent.
The GST is expected to add 2 per cent to our country’s GDP or gross domestic product. Here’s how our biggest tax reform is actually going to affect us by the end of the month.
The taxes on the restaurants will be levied in this way:
- A/C or Liquor Restaurants: 18% tax will be levied.
- Non A/C or Non Liquor Restaurants: 12% GST up from 6% VAT.
- Restaurants with turnover below Rs. 75 lakh: 5% Tax.
- Tea and coffee will be taxed at 5 percent under GST. Currently, these products were taxed at around 3-4 percent.
- Masalas will also be taxed at 5 percent.
- Drinks like Coco-Cola, Pepsi etc are going to become expensive with taxes at 28 percent.
- Tobacco and luxury goods will be taxed at 28 percent.
- Paint, wallpaper and ceramic tiles will be taxed at 28 per cent.
- The prices of several processed food items are also expected to be slashed by a lot, with a tax at 5 percent. It has fallen to 5 percent from current 10 percent tax rate.
- For paying phone bills you need to shell out 18% Tax.
- Personal care products like soaps and toothpastes are actually going to become cheaper. As of now they’re taxed at 24-28 percent. Now, they fall under 18 percent tax slab. Shampoos and deodorants are likely to become more expensive.
- Taxes on movies will now be a uniform 18 percent. Now, movie going will be cheaper because earlier the taxes were around 22-25 percent.
- Cable and DTH services will be set at 18 percent.
- To go to any vacation the taxes on the flight tickets will be levied at the rate of 12 percent for business class and 5 percent for the economy class.
- Economy class is now 5 percent down from 5.60 percent. Business class is 12 percent up from 8.40 percent.
- Tax on A/C and first class train tickets will be 5 percent which is up from 4.5 percent.
The taxes on the hotels will be priced in this way:
- Hotels with rates below Rs.1000 are exempted from GST.
- Rooms priced Rs.1000-Rs.2500: 12 percent GST.
- Rooms priced Rs.2500-Rs.7500: 18 percent GST.
- Rooms priced higher than Rs.7500: 28 percent GST.
The taxes on the clothes will be priced in this way:
- Clothes below Rs.1000 the tax will be unchanged at 5 percent.
- Clothes above Rs.1000 will be charged at 12 percent tax which is up from 8 percent current tax.
The items which are not taxed under the current GST system are:
- Milk, cereal, meat and other daily items have been exempted from GST.
- Here are other things that are exempted: pilgrimages like the Haj, metro travel, and healthcare.
- Drawing or colouring books, stamps, judicial papers, printed books, newspapers