GST (GOODS AND SERVICE TAX) – A uniform taxation system
GST is a common platform where all kinds of 17 indirect taxes come together, which we pay every day or we can say the taxes paid by us on daily basis in some other way, to form one uniform tax called as goods and service tax. It is a belief of our Union Finance Ministry that, if all the indirect taxes come together in a place then the total effect will come down. The combined taxes further being categorized into different percent and which are decided at 5%, 12%, 18% & 28%. The percent will depend on nature and usage of a particular goods or services. The branded and luxurious lives become more costly. Goods and service tax will work on both the Central GST & State goods and service tax and for an Inter-State Transactions the Integrated GST Model will work.
Effects of GST in a very simple & understanding way:
Goods and service tax in true way is a local reformer scheme. In this taxation system there is no place for luxurious livings and branded items. from the followings one can easily understood what are the benefits of GST and how one can utilize these benefits in a very effective way.
1. Dining Out you can go for dining outside but if you want to spend into luxurious hotels like 5 star, 3 star you should carry a heavy pocket with you to pay since you will be going to pay 28% GST for that but if you go to a normal A.C. restaurant then you will pay goods and service tax 18% whereas if the restaurant is Non- Ac then you will save more money as you will pay only 12% GST there.
2. Paying the Telephone Bill/ Postpaid Mobile Bill you will have to pay more as tax rate will be levied more, earlier it was 15% and after goods and service tax comes into effect it will be increased to 18%.
3. Banking and Financial Transactions All the Banking and financial transactions will also become costlier than earlier after GST comes into effect as it will be increased from 15% to 18%.
4. Buying of Car There will be a slight reduction in taxes while purchasing a car after GST comes into effect as there will be a reduction in VAT.
5. Air Travel Traveling in business class by an airplane will be costly for you while for an economy class you have to pay only 5% GST.
6. Buying a Home: Buying a home will become cheaper. Since goods and service tax is a destination based tax by which it set off all taxes accrued earlier in building materials and others, so the final price of a home will be lesser than the earlier prices of home.
7. Branded goods: Branded goods will become costlier as earlier there is no taxes on branded Paneer or vegetables but after goods and service tax comes into effect a 5% GST will be taken on the branded Paneer or preserved vegetables but there will be no GST on unbranded Paneer or fresh vegetables.
8. Perfumes and beauty Products: The GST on perfumes and other beauty products will be on high side as it will be 28%. The agarbatti (Incense sticks) will also become costlier since earlier there was no tax on Agarbattis.
9. LPG: It becomes lower from 15% to 5% after goods and service tax comes into effect.
10. Dry Fruits and Fresh Fruits: Dry fruits and fresh fruits becomes costlier as GST for these will be 12%.
11. Aluminum Foils and other metals: The aluminum metals made thing like aluminum windows, doors even Aluminum foil become costlier after GST as it will be 28% while utensils made from steel or copper will be 12% only.
12. Beverages like coffee and tea: The beverages like coffee and Tea will be charged a GST of 5% but if these will be serve in restaurant then the rate on prepared Tea will be 18% while on coffee it will be 28%. So the coffee in CCD will become costlier.
13. Nil GST: some products like breads, Papad, Kites, Natural Honey (unbranded), Semen, Live trees and plants, Gur, Prasadam, Fertilizers, Sindoor, kumkum, Bindi, Alta, Plastic bangles, Condoms, Judicial stamp papers, newspapers, maps, globe, chart, Handmade Musical instruments, Education services and medical are GST free.
From this context we infer a conclusion that our Union Finance Ministry wants to fulfill the basic necessities of middle class families. Luxury things will be costly and the buyer has to pay more from the recent prices. So, before buying any things and usage of financial services from banking industry will be costlier. Regarding this prepare your financial planning.
Some more news is still waiting regarding GST, what will be the effect of purchasing loans in your personal taxation and the corporate taxation.