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After demonetization, the buzzword in India today is GST, the full form of which is – Goods and Services tax! A word that petrifies all of us, isn’t it? People may or may not be aware of what GST is all about but what everyone knows is that the implementation of GST is going to bring in a wave of change in the way they shop, eat and entertain themselves. But hang on, things aren’t going to get really bad.
Yes, you would have to loosen your purse strings on a few things but then surprise surprise!! There is some saving in store for you as well. So before we sulk thinking GST is all set to deepen the hole in our wallets, let’s unravel its mystery to know exactly the changes it would bring in.
We begin with some good news to help you fill your tummy to the fullest. Rest assured, GST is going to help you eat stomach full without having you to empty your wallet. Just that there is a rider. Where you can eat to your fullest, make sure you control on the intake of beverages during your meal. The scale may slightly go off-balance.
Returning to the burning question you have… Will I be paying more? Relax. You wouldn’t. And more than that, you would also be saving yourself to run through the tiny fonts on the buttery paper bill where along with the food bill, you have to have your eyes scan the various taxes added to it.
With GST, there would be just one bill. All the different taxes shoved down on you under different names will now be combined as one. So now, instead of going through different rates of taxes and other duties, you can now save a tiny bit percentage every time you eat out. This is because of a standard value charged together.
So all in all, a foodie consumer is set in for a pleasant surprise with the implementation of GST as it makes dining out more pocket friendly with a single 18 per cent charge on the total bill value as against the earlier 20 to 24 per cent charges.
Okay, now for those who love sipping on their beverage as they grab a bite. You know aerated drinks and of course alcohol isn’t really good for your health and now with GST, they will not be good for your pocket too! Under the GST, aerated drinks come under the highest rate of tax of a whooping 28 per cent!!! Why? Because they fall under the ambit of luxury goods. These also attract a cess thus resulting in some more money going off your wallet. We don’t want to sound too preachy but you know mixing drinks and food anyways isn’t too good for your stomach and this you can confirm with any health expert.
Shopping and GST
Let us explain this briefly with the following table –
|Products||Current Rates||New GST Rates|
|Edible oil, tea, coffee, spices||9 per cent||5 per cent|
|Computers, processed food||9-15 per cent||12 per cent|
|Soaps, shampoo, hair oil, shaving creams etc||15 – 21 per cent||18 per cent|
|Luxury Goods (additional cess of up to 15 per cent may be put on luxury cars, tobacco and aerated drinks)||21 per cent||28 per cent|
So now when you look at the figures above, you will notice that you daily essentials are set to become cheaper and majority of the other things will have a uniform tax levied on them instead of the variation that exist currently.
Wondering what happens to the prices for apparels?
We know you love shopping for clothes and you are on tenterhooks thinking whether post July 01, would you still be able to afford shopping for apparels? Rest assured, your shopping is only going to get more delightful. Whether online or offline, the new GST is going to make prices come down. Readymade clothing including branded apparel would get cheaper. Why?
That is because the manufacturer will be paying just one tax instead of paying VAT (Value Added Tax) and Octroi at each of his manufacturing stage. For the manufactured goods, under the existing taxation system, we end up paying approximately 25 percent more than the cost of production due to VAT and excise duty. GST will have a uniform 18 per cent for most goods and this is how we shall end up saving some money while shopping.
What about online shopping?
Is it going to get cheaper or heave on the pocket? Good news here too. The manufacturers and online players will have lower costs of logistics and seamless inter-state transport because of a uniform tax structure in place which eventually will be passed on to the consumer making his online shopping experience more delightful and pocket friendly.
Change is never easy and change is never full proof. Where GST implementation is well defined and we do have the new tax rates with us on daily essentials, it is going to be a wait and watch game to stamp the effects of GST as being either beneficial to us or detrimental to our monthly budget. Let’s go with the tide and take a final call once the implementation is done in full swing.