Costlier Or Cheaper Under GST?

cheaper and costlier Items after gst

cheaper-and-costlier-Items-after-gst

India’s $2 trillion economy and 1.3 billion people will now be unified into one of the world’s largest common market under the Good and Services Tax regime, which was rolled out across the country on 1 July, 2017, in place of all other indirect taxes. As consumers we need to be aware of GST, and how this tax is going to affect the cost of living of the common man of India. Here is a comprehensive list of things which are either going to get costlier or cheaper.

What will be cheaper?

Let’s start with the good news first. The GST tax on the following either fall in the 0% bracket or the percentage is lesser than the indirect taxes imposed previously. Thus the price of the following essentials as well as healthcare items are slated to see a fall in price:

  • Food including fresh meat, eggs, milk, butter milk, curd, natural honey, fresh fruits and vegetables, flour, gramflour, salt, prasad and bread will become cheaper.
  • Food grains will cost lesser.
  • Processed food items will be cheaper as the tax rates will be slashed from 15% to 5% under GST.
  • Dining out will become less expensive as the tax has been slashed from 22% to 18 %.
  • Beauty items including Sindoor, kumkum, bindi, bangles, handloom,hair oil, soaps and toothpaste.
  • Life-saving drugs that treat diseases like malaria, HIV-AIDS, tuberculosis, and diabetes will fall in the 5% bracket and thus more affordable.
  • Contraceptives fall under the 0% category and thus will become cheaper.
  • Healthcare services by a clinical establishment, an authorised medical practitioner or paramedics.
  • Services provided by way of transportation of a patient in an ambulance.
  • Electricity.
  • Stamps, judicial papers, printed books, newspapers.
  • Entertainment services like Movie theatres and amusement parks will become cheaper.
  • Airfares for economy class travel has been placed under the 5% bracket and expected to go down under the GST.
  • With tax on branded good slashed from 23-24% to 18%, this category will become more affordable.
  • Hotels will fall under the 18% tax bracket, 4% lower than the 22% charged previously. Thus staying in hotels will become cheaper.
  • Entry level cars and two wheelers are going to be more affordable now.Two-wheelers with engine size below 350 cc, some categories of commercial vehicles including three-wheelers, SUVs will get cheaper under the GST. The tax rate varies from segment to segment.
  • Apple has slashed the price of i-Phones.
  • Paint, cement, electrical items, consumer durables are expected to get cheaper.

More Expensive under the GST Regime

The following commodities and services are going to pinch one’s pocket under the GST regime:

  • Beverages including tea, coffee and aerated drinks.
  • All kinds of Indian spices.
  • Luxury goods.
  • Tobacco products.
  • Mobile bills, insurance premiums, banking charges.
  • Internet, wifi and DTH services.
  • School fees, courier services and air tickets to get expensive.
  • Small cars will become more expensive because they fall under the peak bracket of 28%.

Of the commodities and services falling under the GST regime:

  • 7 per cent will be exempted
  • 14 percent will be in the 5 per cent slab
  • 17 per cent in the 12 percent bracket
  • 43 percent in the 18 percent segment
  • 19 percent will go into the top bracket of 28 per cent.

States including Himachal Pradesh and Uttarakhand are bound to be adversely affected under the new regime as these states previously enjoyed lower tax rates on the goods produced there. However, the GST will erase this privilege that the states enjoyed till now. The manufacturers in these states need to take actions such as adjusting production capacity to bring down the impact.

 

Read More About  GST

What is GST?
How to register for GST?
Various Goods and Services Tax forms
GST Rule Changes
Implementation of the GST in India
Costlier Or Cheaper Under GST?
Revised GST Rate List
Different GST Return Forms