The GST Bill's impact on the common man
What's the story
The GST rate has been proposed to be a three-level tax structure by the GST panel under Arvind Subramanian. The proposed rates are 12% for consumer goods targeting the poor, other items at a standard rate of 17-18% and luxury items at 40%. Once implemented, 17 indirect taxes will be slashed and goods will become cheaper as inter-state taxes will no longer be applicable.
About
GST: What is it all about?
The Indian Parliament has successfully passed the Goods and Services Tax (GST) tax, which will now enable the Central Government to levy a centralised indirect tax for an array of services and products. It will bring into effect one indirect tax that is paid at every stage of sale or purchase. This will slash the existing jumble of indirect taxes paid across different states.
Importance of the bill's passage
The GST's significance
The GST Bill will provide the Government with a comprehensive way to tax all indirect services, instead of the current fragmented method of taxation that is applied in each state, levied at a different rate. It will now consolidate the multitude of taxes into one, thereby improving efficiency. Lowering the Government's loss of money, the GST is expected to contribute nearly 2% economic growth.
Information
When will GST come into effect?
GST is slated to come into effect by April 2017. It was also stated that Jammu and Kashmir will not come under this new tax, while another exclusion will be alcohol. Petroleum, entertainment and electricity will not be included at least for two years.
GST Bill's impact
What is set to become cheaper?
With the GST Bill's introduction, it is estimated that many corporates are set to gain from the new tax. The tax is expected to trickle down to the consumers once it is implemented. Clothing and garments are set to become cheaper, as excise duties and VAT will be slashed. Cars and LED TVs will also become cheaper with the new GST rates.
Goods set to become more expensive
What will become expensive?
For most consumers, eating out will become more expensive once GST is implemented, as the new rates would turn out to be higher than the existing indirect taxes borne by the consumer. Purchasing a phone, or payment of phone bills are said to become expensive. Online shopping and purchase of goods will also cost more, with jewellery also slotted to see expensive prices.