The GST or Goods and Services Tax was implemented in all parts of India on July 1, 2017. GST is a destination based tax that is being hailed as a turning point in Indian economy. GST replaces numerous Central taxes like Excise Duty, Counter Veiling Duty (CVD), Service Tax, Special Additional Duty of Customs (SAD), other charges and the state taxes.
GST was introduced to get rid of tax cascading both at the Centre and in the state to reduce the tax burden on the common citizens of the country. It simplifies the tax system with an integrated Goods and Services tax that is the sum of Central GST (CGST) and State/Union Territory GST (SGST/UTGST). GST ranges from 0% to 28% and the tax slabs are fixed at 5%, 12%, 18% and 28%. Petroleum products, alcohol and electricity have been kept outside the purview of GST. Now a lot of changes have been made to the GST guidelines since it came into being on July 1. Keeping that in mind, here are the important factors you need to know about the gamechanger that GST is.
• Earlier, a total of 228 items were in the highest 28% GST slab. Now the number of items in that slab has been reduced to just 50. Only sin and luxury goods are currently in the 28% tax bracket and the rest of the daily use items have been shifted to the 18% tax bracket.
• Eating out has become much cheaper as restaurants now impose a GST of 5% as opposed to the 18% they charged earlier. Only five-star restaurants at starred hotels where rooms cost above Rs. 7,500 charge 18% GST and can also utilize Input Tax Credit (ITC) benefits. Outdoor catering also falls in the 18% tax bracket and can take advantage of ITC benefits.
• 13 commodities have been removed from the 18% tax slab and shifted to the 12% tax bracket.
• Two things have been moved from the 28% tax slab into the 12% GST bracket and six articles have been moved into the 5% bracket from the 18% bracket.
• Armored vehicles and wet grinder have been moved from the 28% tax bracket to the 12% tax bracket.
The financial experts, industrialists and businesses have welcomed the revised tax rates. They hope that the revised and reduced rates will increase consumption which will result in the growth of the retail industry and the consumer goods sector.
GST was introduced to get rid of tax cascading both at the Centre and in the state to reduce the tax burden on the common citizens of the country. It simplifies the tax system with an integrated Goods and Services tax that is the sum of Central GST (CGST) and State/Union Territory GST (SGST/UTGST). GST ranges from 0% to 28% and the tax slabs are fixed at 5%, 12%, 18% and 28%. Petroleum products, alcohol and electricity have been kept outside the purview of GST. Now a lot of changes have been made to the GST guidelines since it came into being on July 1. Keeping that in mind, here are the important factors you need to know about the gamechanger that GST is.
• Earlier, a total of 228 items were in the highest 28% GST slab. Now the number of items in that slab has been reduced to just 50. Only sin and luxury goods are currently in the 28% tax bracket and the rest of the daily use items have been shifted to the 18% tax bracket.
• Eating out has become much cheaper as restaurants now impose a GST of 5% as opposed to the 18% they charged earlier. Only five-star restaurants at starred hotels where rooms cost above Rs. 7,500 charge 18% GST and can also utilize Input Tax Credit (ITC) benefits. Outdoor catering also falls in the 18% tax bracket and can take advantage of ITC benefits.
• 13 commodities have been removed from the 18% tax slab and shifted to the 12% tax bracket.
• Two things have been moved from the 28% tax slab into the 12% GST bracket and six articles have been moved into the 5% bracket from the 18% bracket.
• Armored vehicles and wet grinder have been moved from the 28% tax bracket to the 12% tax bracket.
The financial experts, industrialists and businesses have welcomed the revised tax rates. They hope that the revised and reduced rates will increase consumption which will result in the growth of the retail industry and the consumer goods sector.
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