Great Expectations from GST

Flash sales were up in the market in order to clear the stock before 1st of July, 2017. Leading merchants were offering big discounts on ACs, cars, phones to beat the GST deadline. People had become interestingly aware of the now non-existing tax systems – VAT, Sales Tax, Entertainment and Amusement Tax, Service Tax, Excise Tax, etc. All because of the GST bill that has come into play from 1st July, 2017 entertaining great expectations from all of us in India.

With tweets about ‘One Nation One Tax‘ striking a debate over the proposed tax rate slabs, GST (Goods and Service Tax) promises to offer huge relief to the citizens of India.

  • Daily necessities such as milk, fruits and unbranded groceries, along with kajal, shall be available at 0%. You need not worry as Indian Government will not let you starve to death from now on, nor let anyone’s eyes miss kajal.
  • A list of processed products such as sugar, tea & coffee, coal, fabric, medicines and dry fruits along with domestic LPG and travel tickets will need you to pay 5% tax. That’s not too much, I guess.
  • Then there is a 12% slab for mobiles, computers, processed food, ghee & butter. You might have to give a little thought to your decision before opting for a new phone or laptop now.
  • Your hair oil, toothpaste, soap, corn flakes, soups, ice creams and printers have found their seats luckily in the 18% slab. I hope this is to prevent over-consumption of these products.
  • While the exclusive seats in the 28% slab have been reserved for small cars, high-end motorbikes, movie tickets, electronic gadgets, cigarettes and aerated drinks.

GST-02.jpg

However, there is subtle irony – ‘The pros and cons of the change can be identified only when the effective rate of tax in our state is determined.

Well, this is because GST bill has three parts – CGST (Central Goods and Service Tax), SGST (State Goods and Service Tax) and IGST (Integrated Goods and Service Tax). As a federal nation, both state and center have the power to levy taxes and utilize them for the betterment of their regions respectively. Within the state movements, CGST and SGST will be applicable while for inter state movements, IGST will come into play.

There is a pretty important concern here – the tax payers should not be confused as to the payments of taxes, if we are to board the benefits of single taxation. 

While approximately 81% of items of public consumption are to fall in the 18% slab or below, the Mango Man (Aam Aadmi) will first take an appreciable time to understand how the new tax system works and then, begin criticizing.

The bill, that aims to bring a change not only in the tax system but also in the federal system of our nation shall see a sea of out bursts and demonstrations before it become widely accepted.

Am I wrong?

Grpahic Credit: Akash Singh

 

 

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2 Replies to “Great Expectations from GST”

  1. In the list of expenses, what matters is not the 81% items consumed into < 18%; but what is 'frequently consumed'. For ex, my online / offline transactions are more in count in terms of the number of times I make a transaction to purchase fruits / grocery which is only once a month. But 18% for Insurance Premium, Banking Services etc is where the blade touches our wallets.

    A better example: Imagine that car purchases are totally tax free, but tax on mobile-recharges are increased to 18%. What's the use.. I'd rather ask for a lower tax slab on 'frequently used items' more than 'essential items' because that's where my benefit is.. Nevertheless, GST is in its infant stages and of course we can expect a lot of improvements in future. At least it started, that's a good news!

    Liked by 1 person

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