GST Ready India

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How the GST rates will affect your money

May 23, 2017

Smartphones, medical devices to cost less with GST, says government

In a bid to ensure that the benefits of lower GST on products — ranging from smartphones to medical devices and cement — are passed on to consumers, the Centre released on Monday calculations to show how the burden of indirect taxes will come down in the new regime.

The detailed analysis from the finance ministry comes days after the GST Council, comprising ministers from the Centre and states, decided on product-wise tax rates and the government threatened to invoke the anti-profiteering clause if the gains were not passed on from July, the scheduled date for GST launch. Click to read more

‘Higher’ GST rates unlikely to disturb consumption: Experts

Higher goods and services tax (GST) rates have sparked fears of a fall in consumption and a slowdown in growth but the reality could be quite the opposite, economists and industry experts said. Price increases do not always hurt demand as consumers’ interest in buying products or services may remain unaffected by any rise in tax rates or other changes in business environment, they said.

The GST Council has increased the service tax on financial services and telecom to 18% from 15%. Many industry executives feel this will impose a burden on consumers and dampen demand. Click to read more

‘GST may cause output cut; positive impact to be delayed’

Though the impending Goods and Services Tax (GST) is expected to have a benign impact on inflation, with most items in the CPI basket kept in the exempt category, it’s the output levels that the analysts are worried about. ICRA in a report said that it expects industry to pare inventory levels during the transition to the GST, mildly dampening production in April-June, the first quarter of the ongoing financial year 2017-18.

It said that the positive impact of GST on the economic activity is likely to be visible only from January-March next year. “July-September FY2018 and October-December FY2018 are likely to witness some adjustment, as the assessees get used to the new compliance procedures and higher working capital requirements. Click to read more

How the GST rates will affect your money

The statutory tax rates under the Goods and Services Tax (GST) Act have been announced and will be become effective from 1 July. These will replace all applicable indirect taxes. While some goods and services are going to get cheaper, some are set to get taxed more.

Currently, various financial services and transactions attract service tax, which will now be replaced by GST. Under the current tax regime, service tax is a flat 15% across all services. However, under GST it will have four slabs: 5%, 12%, 18% and 28%. Here is how it will impact your investments and financial transactions. Financial services will come under the 18% GST rate. Click to read more

So far, the GST Council has got it right

The GST Council has finalised the rates for almost all the commodities, as well as the rates for services. The Council has approved five-tier structural rates — 0, 5, 12, 18 and 28 per cent — for both goods and services.

While the five-tier structure was expected on the goods side, a similar rate structure for services has come as a bit of a surprise. Nevertheless, one message that emerges clearly is that the broad rate structure especially on the goods side, far from being inflationary, may encourage a downward movement in prices. Click to read more

GST to reduce inflation by 2%, says revenue secretary Hasmukh Adhia

Inflation will fall by 2 per cent on implementation of the Goods and Services Tax (GST) and create buoyancy in the economy, Revenue Secretary Hasmukh Adhia has said. With the stage set for the biggest overhaul of India’s tax system since Independence, the government will launch a massive awareness campaign to educate consumers about GST so that they are not fleeced by traders in the name of new tax.

Adhia said the all-powerful GST Council will meet next week to decide on tax rates of contentious items like gold, bidi and biscuits, just in time for its rollout from July 1. Click to read more

GST: The coming disruption in the wholesale trade

Most fast-moving consumer goods (FMCG) companies flagged weakness in the wholesale channel as a problem that affected sales growth in the March quarter. The rural market has been affected more than urban markets. Wholesalers operate in urban markets too but to a smaller extent and companies have direct reach through their own distributors. Since the rural sector can contribute to as much as 30-40% of sales for some mass-market products, the health of this channel is vital. If demonetisation was the first blow, then the goods and services tax (GST) is the second blow that is lying in wait. Click to read more

Realty implications: Homebuyers may see some rise in prices after GST

Homebuyers could see a rise of 1-3 per cent in overall cost under the new indirect tax regime.

The goods and services tax (GST) has brought the real estate sector partially under its ambit by taxing works contracts at 12 per cent, exclusive of stamp duty.

“Under current service tax, with abatement rules, the effective service tax for under-construction properties is 4.5 per cent. Over this, states have value-added tax (VAT) of 3.5-4.5 per cent. The total is not more than 9.5 per cent in any state,” said Anuj Puri, chairman, Jones Lang Lasalle Residential (JLLR). Click to read more

Taxing times: With GST, a multi-location service provider would file atleast 37 returns per year

With epochal decisions being made by the GST Council in Srinagar, India, now is soon expected to hop on to a new tax bandwagon – GST. Touted as a reform to unravel the various convoluted knots of the current state and central levies, GST is expected to create a seamless nationwide market in India.

Identical to most reforms across the globe, GST too is expected to be a mixed bag of pluses and minuses for a business. Of the various advantages envisaged under the GST era, the focal one for most businesses is the erasure of a perplexing array of taxes on a single business transaction with some taxes like CST, entry tax, stock retention VAT reversal, etc becoming a cost as well at each limb of the supply chain. Click to read more

Higher GST on inputs accessories to hit tractor makers

The Goods and Services Tax (GST) is likely to hit makers of tractors and ultimately farmers who buy them. The inputs and accessories of a tractor now attract a total tax of 17.5% now (central value added tax (Cenvat) of 12.5% plus state VAT of 5%). About 70% of the inputs that go into making a tractor are procured locally and the rest from outside the state of manufacture/assembly. Apart from Cenvat, a 2% central sales tax is levied on inter-state purchases resulting in an effective tax of about 13.7%. Click to read more

GST: Puja items to be exempt, Homeopathic medicines, surgical instruments to be cheaper

Goods used in puja and other Hindu rituals (havan) will be exempt and Ayurvedic and Homeopathic medicines will be cheaper when the new Goods and Services Tax kicks in from July, according to an estimate of the finance ministry.

“Puja samagri including havan samagri will be under the nil category. However, exact formulation for the same is yet to be finalised,” the finance ministry said in a statement late on Monday.

The tax burden on medicines, including Ayurvedic, Unani, Siddha, Homeopathic or Biochemic, will be cheaper. These items now attract more than 13% tax, including a 6% central excise duty and a 5% VAT. Click to read more

Passenger-friendly GST should help low-cost aviation stocks to take off

The domestic aviation industry, which has been witnessing tepid growth since the past three months, is poised to take off after some much-needed boost in the GST taxation policy.

Under the GST, economy class air tickets will get cheaper with service tax lowered to 5 per cent from 6 per cent earlier. However, for premium class air travel, the taxes have been raised to 12 per cent from 9 per cent. Click to read more

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