As we know that the Indian Government has taken another step to Improve the Economical System of India. That Step or Initiative is popularly known as GST – Goods & Services Tax.
What is GST ?
GST also known as Good & Services Tax is a new initiative of Indian Government in which the GST will replace all the old taxes which had been charged on each and every commodity from a long period of time.
The following taxes will be replaced by the GST:
The GST was launched on the midnight of 30 June 2017 by the Prime Minister of India Narendra Modi. It was the biggest Tax Reform ever launced or implimented by the Indian Government.
How the Tax will be Charged?
GST will be Charged on all transactions such as sale, transfer, purchase, barter, lease, or import of goods and/or services.
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Here is How the GST will be Charged :-
Tax Rate – (0%)
No tax will be charged on items like jute, fresh meat, fish chicken, eggs, milk, butter milk, curd, natural honey, fresh fruits and vegetables, flour, besan, bread, prasad, salt, bindi. Sindoor, stamps, judicial papers, printed books, newspapers, bangles, handloom, Bones and horn cores, bone grist, bone meal, etc.; hoof meal, horn meal, Cereal grains hulled, Palmyra jaggery, Salt – all types, Kajal, Children’s’ picture, drawing or colouring books, Human hair
Hotels and lodges rent costing below Rs 1,000, Grandfathering service will be FREE under GST. Rough precious and semi-precious stones will be charged at GST rate of 0.25 per cent.
Tax Rate – 5%
Items such as fish fillet, Clothing below Rs 1000, packaged food items, footwear below Rs 500, cream, skimmed milk powder, branded paneer, frozen vegetables, coffee, tea, spices, pizza bread, rusk, sabudana, kerosene, coal, medicines, stent, lifeboats, Cashew nut, Cashew nut in shell, Raisin, Ice and snow, Bio gas, Insulin, Agarbatti, Kites, Postage or revenue stamps, stamp-post marks, first-day covers
Transport services (Railways, air transport), small restraurants will be under the 5% category because their main input is petroleum, which is outside GST ambit.
Tax Rate – 12%
Clothing above Rs 1000, frozen meat products , butter, cheese, ghee, dry fruits in packaged form, animal fat, sausage, fruit juices, Bhutia, namkeen, Ayurvedic medicines, tooth powder, agarbatti, colouring books, picture books, umbrella, sewing machine, cellphones, Ketchup & Sauces, All diagnostic kits and reagents, Exercise books and note books, Spoons, forks, ladles, skimmers, cake servers, fish knives, tongs, Spectacles, corrective, Playing cards, chess board, carom board and other board game like ludo.
State-run lotteries, Non-AC hotels, business class air ticket, fertilisers, Work Contracts will fall under 12 per cent GST tax slab
Tax Rate – 18%
This include footwear costing more than Rs 500, Trademarks, goodwill, software, Bidi Patta, Biscuits (All catogories), flavoured refined sugar, pasta, cornflakes, pastries and cakes, preserved vegetables, jams, sauces, soups, ice cream, instant food mixes, mineral water, tissues, envelopes, tampons, note books, steel products, printed circuits, camera, speakers and monitors, Kajal pencil sticks, Headgear and parts thereof, Aluminium foil, Weighing Machinery [other than electric or electronic weighing machinery], Printers [other than multifunction printers], Electrical Transformer, CCTV, Optical Fiber, Bamboo furniture, Swimming pools and padding pools, Curry paste; mayonnaise and salad dressings; mixed condiments and mixed seasonings
AC hotels that serve liquor(Alcohol), telecom services, IT services, branded garments and financial services will be charged at 18 per cent tax under GST, Room Renting between Rs 2,500 and Rs 7,500, Restaurants inside five-star hotels
Tax Rate – 28%
This will include Bidis, chewing gum, molasses, chocolate not containing cocoa, waffles and wafers coated with choclate, pan masala, aerated water, paint, deodorants, shaving creams, after shave, hair shampoo, dye, sunscreen, wallpaper, ceramic tiles, water heater, dishwasher, weighing machine, washing machine, ATM, vending machines, vacuum cleaner, shavers, hair clippers, automobiles, motorcycles, aircraft for personal use.
Private-run lotteries authorised by the states, hotels with room renting above Rs 7,500, 5-star hotels, race club betting, cinema will be charged at 28 per cent tax slab under GST.
So this is How The TAX Will Be Charged.
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What are the Benefits Of GST?
Social Benefits – It will give a huge benefit to the common people as they will not need to pay different taxes on a single commodity which varies from shop to shop. Due to which the price of the products will be fixed at a particular rate charged by the Government.
Many commodities come in the category of 5% Tax under GST which is quiet low as compared to before.
So there will be a huge advantage of GST for Common People.
Economical Benefits – GST will play a major role for building the Economical Growth of India.
GST will replace those unwanted taxes which were always been the burden for a Producer of Goods and Services. Now, the raw materials will be sold with a fixed tax rates charged by the government and this will help the producers to produce goods at cheap rates and sell them at a price which can be acceptable by the common people. If the price of goods and services will decrease then it will increase the demand of goods consumption and hence it will inscrease the supply of goods productions and therefore the economy will run smoothly.
So these are the Benefits of the GST.
So this was all about GST – Goods & Services Tax.
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