GST Set For July 1 Rollout: Here is the List of GST Fixed Tax Rates

gst set for rollout

gst set for rollout

On 19 May, the tax rates for the ensuing Goods and Services Tax (GST) tax regime were decided by the GST Council. The new rates are supposed to come into effect from 1 July 2017. A meeting was held in this regard at Srinagar. It has been stated that education and healthcare would be exempted from GST. Hasmukh Adhia, the Union Revenue Secretary of India, has also revealed that expenses such as metro travel, local train tickets, and pilgrimage such as Haj would be exempted from GST as well.  According to Pratik Jain, who works as Partner and Leader of Indirect Tax at PricewaterhouseCoopers (PwC) India, the tax structure that has been proposed for GST happens to be a lot more complicated than what companies are working with right now.

The various tax brackets

As per the new structure four tax brackets have been decided upon for now – 5, 12, 18, and 28%. These rates would apply on different services such as telecom, hotels and restaurants, to name a few. This is being said to be the most significant tax reform since India became independent. Adhia also states that Indian Government has decided to impose a tax collected at source (TCS) of 1% for e-commerce entities such as Snapdeal and Flipkart in spite of the fact that the law allows them to charge up to 2%.

The biggest beneficiaries

It is being said that the ones who would be benefitted the most from the new regime are steelmakers as well as a few consumer goods. Personal care items such as sanitary-wear are expected to be subjected to the highest rate of taxation and the same would be applicable for air-conditioners as well. Fast-moving consumer goods (FMCGs) are expected to be the biggest winners in this case. Products used regularly such as milk, grains and cereals, and fruits and vegetables have been exempted from this new tax structure.

How are experts seeing things?

As per experts, this new tax structure could make it tougher for businesses to remain compliant and also let them be at the mercy of a tax bureaucracy that is always going to intrude in each and everything that they do. In the present system most of the goods and services being sold across India are being taxed at a flat rate of 15 per cent. However, its supporters are saying that GST would make it easier to do business by making the tax structure and compliance a lot simpler than before.

Some tax details

It is expected that cab aggregator services and goods transports would be taxed at the lowest bracket – 5%. However, the rates would be different for hotels and restaurants – it will depend on the kind of business that they are doing. If you were to travel in a business-class flight you would need to pay a tax of 12%. Areas such as financial services and telecom would be taxed at a rate of 18%. In case of services this is the standard rate.

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