Awareness and the Impact of the Current GST Rates in India
The GST council proposed GST rates in India on 18th March 2017 that would be applied to all goods and services. The various goods and services were divided into different tax brackets, which were 5%, 12%, 18%, and 28%.
The New GST Rates on Goods and Comparison with the Old Rates
Here is a list of GST rates in India for different industries:
- Electronic goods: Under the new rates, products like refrigerators, heaters, ACs, dishwashers, copiers, etc. are costlier. The GST rate of 28% is higher than the older rate of 26%. Mobile phones are levied 18% in place of the earlier 6%.
- Consumer goods: Items like salt, milk, curd, fresh fruits, and bread have been exempted. The tax is lower in items, such as toothpaste, hair-oil, sugar, and soap. The tax has been reduced from 12 to 8 % on vegetable oil, bakery items, etc. Things like milk beverages and ice creams are also cheaper. The tax on tampons has been increased by 4%, while that on contraceptives has been removed.
- Services: The tax on telecom and IT services are higher. Cinema is cheaper than before, and the railway and airline transport will also be less expensive. In Cinema, taxes are limited to 28% as compared to the earlier 15 to 100%. Railway fares and economy flights are cheaper. Services related to hotels are also cheaper.
- Real Estate: For affordable housing properties, the GST rate is 1%, while for other non-affordable ones, it is levied at 5%.
- Maintenance charges: Those paying maintenance charges up to Rs.7500 per month will be exempted, while those paying more will be charged GST.
- Rent: If a property is rented out for residential purposes, it will be exempted. If a property is rented out for business reasons, then GST will be levied since it will be treated as a service.
- Gold: GST on gold has been hiked to 3% as against the 2% which was collected earlier.
The Opinion of Experts on the GST Rates in India
Experts think that the new tax rates will benefit the common man. They say that, if rightly implemented, GST will fuel the growth of the Indian economy. They feel that the new rates make the changing and adding of taxes more stable. Consumers will get shielded from sudden price increases. Goods and services will become cheaper than before. GST has unified the entire nation, which is now paying a single tax.
They also appreciated the new GST rates of 5% on identified life-saving drugs. Experts felt that the lower tax rates for the budget hotel sector were also a welcome move, which would provide standardized accommodations to middle-class travellers. Hotels are the maximum contributors to the tourism sector and, the reduced tax rates will increase revenues from the tourism and travel industry in the coming years.
GST will help the government to receive more revenue since there will be lesser tax evasion. Traders will benefit from transparent rules, lesser tax filings, and simpler bookkeeping.
As a business person, it is essential to know about the prevailing GST rates in India. 3E Accounting will provide assistance for business compliance for all your GST related services. It includes filing of GST returns, GST registration, getting GSTIN, and a few more. We will help you to update your software so that you can maintain proper accounting records and be GST compliant.
Feel free to contact us, and we will help you with the best possible we can.