GST vs household budget. How are you getting affected?
Posted on: 14/Jul/2017 12:22:06 PM
With the implementation of Goods and Services Tax on 1st July, the tax system in India has underwent a complete changeover. The path to implementing GST was both resistive as well as exciting.
While on one hand, the benefits of the 4-structure tax system is being debated, its positive effects are eventually getting trickled down to the masses.
There are 4 different tax slabs which are 5%, 12%, 18% and 28%. There is also an exemption and additional cesses category. With the GST, there will be different kinds of impact in the household budget of everyone. Based on lifestyle patterns, the changes in household expenses will be quite the same for everyone.
While the prices of a few household articles have come down, a few others have seen uptick in rates. For food products, there is 0 to 5 percent GST, and for toiletries, there is 18 percent GST. So, here is a brief on the overall GST impact on household budget:
Groceries:
First of all, a few grocery items such as milk, flour, pulses, bread, fruits, veggies, tea, coffee, basmati rice, etc are excluded from the ambit of GST. Items such as packaged curd, cheese, paneer, biscuits, corn flakes, face creams, shampoos, hair oils, and medicines have got cheaper. Items like chicken, butter, bhujia, etc will turn costlier.
Lifestyle:
Entertainment expense have got reduced from earlier 30 percent to 28 percent.
Airfares:
There is reduction in rate of economy class airfare. The tax levied on airfare has come down from 9 percent to 5 percent.
Cab rides:
This is going to come down substantially if youre a regular cab user as the service tax is reduced from 6 to 5 percent.
Telecom services:
The service charge on DTH and cable TV have reduced from 18 percent to 15 percent and hence, the cable TV charges will get dearer.
Education:
Under GST, there is no tax towards preschool and school education. And there is uptick in GST on services offered by colleges and higher universities from earlier 15 percent to 18 percent.
Luxury stays:
For stay in 5-star hotels and restaurant bills, you will have to spend more as luxury expenses are quoted with 28 percent tax.
Car prices:
A lot of companies have altetered price of car models after rolling out GST. Car purchase now attracts GST of 28 percent. An additional cess of 1 to 15 percent is imposed. 3 percent cess is imposed on diesel engine cars with less than 1500 cc. Coming on to small petrol engine cars with lesser than 1200 cc, 1 percent cess is imposed. Large cars with more than 1500 cc and SUVs that are above 4 metres in length will attract 15 percent cess apart from 28 percent GST. There is 12 percent GST imposed on electric vehicles.
There are various items that have seen price change. All you need to do is modify your household budget accordingly to avoid any financial mess.
