With the Goods and Services Tax (GST) turning effective in the country at 12 am on July 1, following a special session held at the Central Hall of Parliament, India has witnessed launch of the biggest tax reform since its independence in 1947 .
The hour-long event certainly evoked memories of the ‘Tryst with Destiny’ moment of 1947 to mark the occasion of India independence from the British empire.
In the august presence President Pranab Mukherjee, Vice President Hamid Ansari, Lok Sabha Speaker Sumitra Mahajan, and Prime Minister Narendra Modi and his council of ministers, the GST was rolled out at the midnight.
It’s pertinent to mention that GST is the first of its kind system in the country in which the Centre and State governments will put consolidated efforts towards a same direction.
There are four tax slab categories under the GST — 5%, 12%, 18% and 28% .
The newly introduced GST from July 1 onwards is aimed at taking India towards exponential growth. Awaited with deep sense of curiosity and anxiety by people across the country, it is believed to be the disruptive change that can give a fillip to the country’s economic growth.
A number of media reports have reported their own anticipated or quoted versions about the impact of the Goods and Services Tax (GST), suggesting the some of the following possible effects in brief:
Banking services in India: With BFSI services placed in the 18% rate slab under GST than previous 15% service tax, may lead to ATM withdrawals, cash deposits, cheque book issuance, and demand drafts will cost more.
Costly credit card bills: People will now have to shell out more for credit cards bills, as financial services would attract a higher tax of 18% in comparison to 15% as existed previously.
Costly insurance premium: The rate for insurance services has been kept at the standard rate of 18 per cent including health insurance policies. It is a three percent rise against the existing rate.
Staying in hotels to cost more: As per new taxation system, hotel room tariffs between Rs 1,000 and Rs 2,500 bracket will attract 12% tax while hotels with room rents above Rs 7,500 will draw a 28 % GST rate.
Benefit for the underprivileged: All States are slated to gain immensely as they shall now get equal development opportunities. Under the new taxation reigme, such systems have been developed that the underprivileged will get all the promised facilities.
What will get Cheaper?
Stating an elaborate list of things to get Cheaper, The Economic Times reported a list of what may get cheaper now :
3. Medicines for diabetes, cancer
5. Diagnostic kits
5 Milk powder
7. Butter milk
9. Unbranded natural honey
10. Dairy spreads
15. Sunflower oil
16. Coconut oil
17. Mustard oil
20. Sugar confectionery
25. Fruit and vegetables
Items of daily use
2. Hair oil
3. Detergent powder
5. Tissue papers
11. LPG domestic
16. Cake servers
17. Fish knives
21. Tooth Powder
2. Tractor rear tyres and tubes
3. Weighing machinery
4. Static converters (UPS)
5. Electric transformers
6. Winding wires
8. Crackers and explosives
13. Luxury cars
16. Economy-class air tickets
17. Hotels with tariff below Rs 7,500
19. Fly ash bricks and blocks
GST Council to Review
“The review meeting of the GST Council would be on the first Saturday of August,” a news agency quoted Central Board of Excise and Customs Chairperson Vanaja N Sarna as saying on Saturday.
Central Board of Excise and Customs’s 100 FAQs
Meanwhile, the Central Board of Excise and Customs (CBEC) which started a new Twitter handle (@askGST_GoI) to reply to industry queries about the GST about a month ago, recently scrutinised all the tweets received on the new handle and turned them around into 100 frequently asked questions (FAQs).
Touching upon various aspects of GST, these questions include issues such as registration, refund, supply, cess, input tax credit, composition scheme, transition, invoice, exports and state GST.