The Goods and Services Tax (GST) was approved in August 2016. It’s due to be implemented anywhere from April 1 2017 to September 16 2017. With the launch of the GST bill, people are wondering how things will change. Here’s what you a common man needs to know about product rates and tax amounts you’ll be paying after GST and how GST will affect your finances.

Bills and receipts usually have Value Added Tax (VAT), service taxes, and cess for different causes like Swachh Bharat, Krishi Kalyan, etc. With GST, all of these will come under one umbrella. This makes tax payments easier for everybody. This will also benefit state and central governments.

GST And Common Man

The current tax system in India is complex. The cumulative tax system makes it difficult for businesses to cope. With GST, setup and operating costs of businesses will be reduced. This leads to reduced costs for end consumers.

GST will affect the costs of almost all products except petroleum and alcohol. The upcoming India GST council will decide what consumers pay for each product after passing of the bill.

Things That Will Get Cheaper

With GST, your online shopping can be a lot cheaper

• Most Goods And Services We Purchase: When GST is implemented, boundaries between states will be removed. This will avoid ‘tax on tax’ as goods move through states. Separate state and central government taxes won’t be charged. This leads to tax rates being reduced to as much as 18% of the cost price.
• Online Shopping: With GST making inter-state trading smoother and reducing the costs of logistics, import and export will become faster. This will provide a big boost to e-commerce businesses, leading to a cheaper online shopping for consumers.
• Cars: This is one sector that will be greatly affected. With GST, the components of cars will become cheaper. That’ll lead to cheaper rates for cars overall. The variation in selling prices of cars in different states will also be removed with GST.

Things That Will Become More Expensive

The GST bill isn’t an all-beneficial change. There are some sectors that’ll have increased tax rates.

• Jewellery: Currently, only 2% of the effective taxes on jewellery is passed to the customer. After GST is implemented, this rate can increase up to 6%. This will largely impact the jewellery sector. If you’re looking to buy some jewellry, then do so before the bill comes into effect.
• Telecom: Currently, the telecom sector has a service tax rate of 14%. With GST, this can increase up to 18%. This will lead to an increase in telephone bills.
• Banking Services: Currently, the tax rate is 14% for all banking transactions. After GST, this can increase from 18 to 20%. With this, operating expenses for different sectors like insurance, telecommunication, etc. will also increase.

GST Tax Rates

Some sectors will face more heat due to high tax rates. But that’s not to say GST is a bad thing. With all the consolidation that’s happening, it’s set to ensure that businesses and end consumers face a lesser tax burden and a less complicated tax scheme to deal with.

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