GST (Goods and Services Tax)
One of our previous blog was about GST, when the bill was passed in the lok sabha. GST has now been implemented from 1st July 2017, as stated by the Government.
This bill has created confusion and chaos among the citizens of India. People are unaware about what the Goods and Services Tax exactly is. So, we have come up with this blog which clearly explains what the Goods and Services Tax exactly is.
GST is the combination of all taxes. It isn’t a new tax implemented by government of India. GST basically is the effective tax imposed on the product. According to the GST council there may be tax imposed on certain goods. The percentage of tax imposed would be one of the following: 5%,12%,18% or 28%.
Why has the Government chosen GST
In order to discard all the taxes from, across the country, the government of India has imposed the Goods and Services Tax. In India, there are many small businesses run by people.These businesses do not pay taxes to the Government. This eventually reduces the revenue earned by the Government. In order to surpass that, the Government introduced GST. Now, every industry must register itself to the Government and obtain a GST bill number.
GST enables the Central Government to decide the tax on goods. The State Government has no role to play in it.The prices of a few products would remain unaffected even after the implementation of the Goods and Services tax
Products exempted from GST
Exempted: free (a person or organization) from an obligation or liability imposed on others.
There are nearly 80 products which are exempted from the Goods and Services Tax. The price of the products free from the Goods and Services Tax is decided by the State Government.
Some of the exempted products are:
Common salt, curd, milk, egg, petrol, flour, butter milk, natural honey, vegetables, fruits, wheat, corn flour, vegetable oil, contraceptive, bread, stamps, judicial documents, printed books, bangles, and hand-loom products.
Some products cost higher after GST
The prices of restaurant food, alcohol, luxury hotels, etc increase after implementation of GST. In addition, the prices of mobile bills, credit card transactions, insurances, tours and travels, jewellery may increase as well.
About 81% of household products are free from the Goods and Services Tax.
1) The products with 5% of the Goods and Services Tax are:
Tea, sugar, cashew, paneer, incense sticks, etc.
2) The products with 12% of the Goods and Services Tax are:
Butter, ghee, pickles, fruit juices, coconut water, jam, jelly, etc. 3) The products with 18% of the Goods and Services Tax are:
Toothpaste, hair oil, shampoo, soup, ice cream, soap, etc.
The Goods and Services Tax implemented on bikes is only 28%, hence there is a reduction in the prices of bikes.
The prices of electronic goods is reduced because the tax implemented is only 28%
The tax on movie tickets is also reduced to 18% which was previously 28%.
Motto of the Government
If this tax is implemented, the citizens will have to pay all their taxes. This will eventually be beneficial for the Government as more revenue will be collected. Also, this tax will help to maintain equality in the prices of products all over the country. Lastly, the Government will be successful in keeping the record of the tax-payers and the non tax-payers.