Household budget affected due to implementation of GST

By | June 28, 2017

How GST rollout on July 1 will affect your household budget? Which commodities or goods or services will be cheaper and costlier? Know here the Balance sheet.

Household budget

After implementation of GST on July 1, the country’s economy will look quite discrete as body and bones. The biggest reform in the history of tax structure of the country after independence will have definite influence on your household budget. There is a hope that the country will ‘One Tax One Nation’. And country will turn into a ‘Single Common Market’. So that inter-state transactions will be easy and commodities will reach to people comfortably and with less efforts. And availability of goods and services in various and far away markets makes things uncomplicated.

Another outlook interprets as this new tax regime will raise Indian GDP from 1.5 to 2.0 %. At the moment, services which don’t fall under service tax regime like health and education are also kept out of GST rates. Similarly, provisions, vegetables, milk, etc. also don’t fall under GST rates.

Know more: what will be cheaper and costlier as soon as implementation of GST. Prepare your household budget accordingly.

  • There will increase in your telephone bill as tax rate is fixed higher than earlier at 18% instead of 15%.
  • In a similar way, service of beauty parlor will be costlier than earlier.
  • To buy two wheeler will be cheaper but driblet. As the earlier VAT and Excise duty combined rates were 30% on purchase of bike or scooter and GST rate is fixed at 28%.
  • Small cars about 4 meters length will be cheaper. These cars will be cheaper chaotically as GST rate is fixed at 29% while the current tax rate is 40%.
  • On the other hand, prices of luxury cars will be declined too because maximum 43% tax rate is to be levied (28% GST plus 15% surcharge) on such cars while currently buyers pay 46% tax.
  • Economic flight tickets will be cheaper slightly as the current tax rate is 5.6% and in GST the same is fixed at 5%.
  • But business class tickets will be costlier. As currently it has 8.4% tax rate while the later will be 12% in GST.
  • If you will buy smart phone after July 1, you have to pay 1.5% less tax. It means smart phones will be cheaper.
  • There is no relaxation in consumer durable items in GST regime. To the date, these items are charged at 25% to 26% tax and in GST, 2% more tax will be payable.
  • There is no change in garments below Rs. 1000/-. It is as it was at 5%. But precious or branded garments will be costlier because it has 8% tax rate now, while in GST it will be 12%.
  • Property ready for possession has same provisions as now, only stamp duty is to be paid. But purchase of under construction property will attract 12% tax. And under construction houses will attract 6% tax.
  • Coaching classes will be costlier as GST will attract 18% tax instead of earlier 15%.
  • Cinema, theatre, cable, DTH services, etc. – all these entertainment services will be cheaper as it will attract maximum 18% GST which is definitely low in compared to tax levied now by all various sates government. In Maharashtra, 35% tax is collected currently.
  • In GST, prices of medicines will decline as currently 14% tax is levied on it, while it is fixed at 12% in GST.
  • Banking services will be costlier because at the moment 15% tax is payable on it while in GST it is fixed at 18%. i.e. from July 1, Demand draft, fund transfer service will cost more. Thus, term policies, endowment policies, ULIPs, etc. insurance premiums will also cost more.
  • From July 1, first, second and third AC railway tickets will cost more. Suburb railway services will have to pay little bit more on first class tickets.
Category: GST

Leave a Reply