The introduction of reforms like demonetization, RERA and GST Registration in India were meant to bring about greater transparency and security in various sectors. The effects of demonetization is still a hotly debated topic, while RERA’s presence has been applauded all over the country in the realty sector, now let’s take a look at the effects of GST on tax rates:
- Mobile phones rates up: Classified as luxury items: mobile phones, refrigerators, furniture, leather bag, bicycles and more increased from 2% to up to 10% for some items.
- Perfumes to cost more: Following the above trend, shampoos, perfumes, skincare products and beauty items saw a rise of 2%
- Highest slab: Wallpapers, paints, plaster, ceramic tiles, putty, tempered glass and more got to hit the worst with the percentage of increase up to 10%
- Exemptions: Fresh Milk, vegetables, fruit, juices were exempt from GST as were condoms, human blood as well as homoeopathic and Ayurveda medications.
- Lower tax on minerals: GST rates of petroleum, coal, lignite, coal, tar and more were reduced to up to 5%.
- Cab booking: Booking an Ola or Uber will be cheaper now as the tax rate has come down from 6% to 5%.
- Footwear: Footwear costing more than Rs 500 will have a GST rate of 18% from an earlier rate of 14 %. But rates for the footwear below Rs 500 has been reduced to 5%. As for the ready-made garments, the rates have been reduced to 12% from an existing 18%
- Train fares: There will not be much of a change as the tax rate effectively increased from 4.5% to 5% in GST. But, passengers who travel on business trips can claim Input Tax Credit on their rail ticket which will help them to reduce expenses. Travellers of sleeper classes or those of local trains will not be affected, but first-class travellers will have to pay more.
- Movie tickets: The verdict is that tickets costing below Rs 100 will be charged a GST of 18% but prices above that, will have a higher tax rate of 28%.
- Property: Properties under construction will be cheaper than read-to-move-in ones. The tax for an ongoing-construction property is 18% but the actual rate on this will be around 12% due to the input tax credits which will be availed of by the builder.
Thus, while some products have been affected hugely, some have been left relatively unscathed or with a minor increase in rates similar to a little slap on the hand. It is good to see that fruits and vegetables or train fares, on the whole, are not being affected, now if only we could buy some nice footwear above RS 500 then that would have been more.