GST Guide for the Consumers and Traders

Contrary to what was thought before, GST can bring in relief to the consumers and brings uniformity to the prices of goods and services

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GST Guide for the Consumers and Traders
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Despite, the strikes and protests against GST, there are some benefits as well to the common men out of this new regime. There are in total four slabs: 5 per cent, 12 per cent, 18 per cent and 28 per cent. Apart, there are host of items that are exempted from the taxation.

Exempt

A number of food items have been exempted from any of the tax slabs. Fresh meat, fish, chicken, eggs, milk, butter milk, curd, natural honey, fresh fruits and vegetables, flour, besan, bread, all kinds of salt, jaggery and hulled cereal grains have been kept out of the taxation system.

Bindi, sindoor, kajal, palmyra, human hair and bangles also do not attract any tax under GST.

Drawing or colouring books alongside stamps, judicial papers, printed books, newspapers also fall under this category.

Other items in the exempted list include jute and handloom, Bones and horn cores, hoof meal, horn meal, bone grist, bone meal, etc.

The services that are exempted include Grandfathering service. The low budget holidays are exempted with lodges and hotels below Rs.1, 000 falling into this category. The semi-precious and rough precious stones shall be attracting 0.25 percent GST rates.

5% tax

Goods
An array of food items such as fish fillet, packaged food items, cream, skimmed milk powder, branded paneer, frozen vegetables, coffee, tea, spices, pizza bread, rusk, sabudana, cashew nut, cashew nut in shell, raisin, ice and snow will be priced at 5 per cent tax.

Apparel below Rs 1000 and footwear below Rs 500 are also in this category.

Some items in the fuel category like bio gas, kerosene and coal are in this slab.

Items from the health industry in this category include medicine, insulin and stent.

Other items in this slab are agarbatti (incense sticks), kites, postage or revenue stamps, stamp-post marks, first-day covers and lifeboats.

Services

Transport services like railways and air travel fall under this category.

Small restaurants will be under the 5% category because their main input is petroleum, which is outside GST.

Gold has been taxed under a separate slab of 3 per cent.

12% tax

Goods

Yet another category of edibles like frozen meat products, butter, cheese, ghee, dry fruits in packaged form, animal fat, sausage, fruit juices, namkeen and ketchup & sauces will attract 12 per cent tax.

Cellphones will also be priced in this category.

Cutlery items like Spoons, forks, ladles, skimmers, cake servers, fish knives, tongs fall in this slab.

Ayurvedic medicines and all diagnostic kits and reagents are taxed at 12 per cent.

Utility items like tooth powder, umbrella, sewing machine and spectacles and indoor game items like playing cards, chess board, carom board and other board games like ludo are in this slab

Apparel above Rs 1000 will attract 12 per cent tax.

Services

Non-AC hotels, business class air ticket, fertilisers, work Contracts will fall under 12 per cent GST tax slab

18% tax

Goods

Another set of consumables are listed under the 18 per cent category- biscuits, flavoured refined sugar, pasta, cornflakes, pastries and cakes, preserved vegetables, jams, sauces, soups, ice cream, instant food mixes, curry paste, mayonnaise and salad dressings, mixed condiments and mixed seasonings and mineral water.

Footwear costing more than Rs 500 are in this category.

Items like Printed circuits, camera, speakers and monitors, printers (other than multi function printers), electrical transformer, CCTV, optical fiber are priced at 18 per cent tax under GST.

Other items in this slab include bidi leaves, tissues, envelopes, sanitary napkins, note books, steel products, kajal pencil sticks, headgear and its parts, aluminium foil, weighing machinery (other than electric or electronic weighing machinery), bamboo furniture, swimming pools and padding pools.

Services

AC hotels that serve liquor, telecom services, IT services, branded garments and financial services will attract 18 per cent tax under GST.

28% Tax

Goods
The residuary set of edibles which include chewing gum, molasses, chocolate not containing cocoa, waffles and wafers coated with chocolate, pan masala and aerated water fall in this category.

Bidi attracts 28 per cent tax.

An array of personal care items like deodorants, shaving creams, after shave, hair shampoo, dye and sunscreen are in the highest tax slab as well.

Paint, wallpaper and ceramic tiles are priced at 28 per cent.

Water heater, dishwasher, weighing machine, washing machine, ATM, vending machines, vacuum cleaner, shavers and hair clippers have been clubbed together in this slab.

Automobiles, motorcycles and aircraft for personal use will attract 28 % tax – the highest under GST system.

Services

5-star hotels, race club betting and movie tickets above Rs 100 are under the 28 per cent category.

If the GST regime is compared with the pre-GST regime, the goods and services that are taxed between 3-9 percent will now be taxed 5 percent. The goods and services which used fall in the tax bracket of 9-15 percent will under GST will be taxed 12 percent and previous tax bracket of 15-21 percent will now be 18 percent and the tax bracket of over 21 percent will now be 28 percent. Thus, the GST is not all bad for the consumers as thought before. In fact, the GST will bring about uniformity in the prices of goods and services that used to vary between geographical locations.

However, the concern remains with building and maintaining the IT infrastructure [which called GST network (GSTN)] for the new tax regime. Earlier, the issues were raised by the members of the GST council regarding the preparation level of implementing GST through GSTN. Not everyone was satisfied with the readiness of the GSTN.

Speaking to the media after the GST council meeting, West Bengal finance minister Amit Mitra said that given the fact that three billion invoices would be uploaded every month on GST network, he was not fully satisfied with GSTN’s preparation. “They have done trial runs on only 100-200 companies and even during those trial runs, many challenges were faced in uploading invoices,” he says.

Therefore, while, the GST as a concept has strength with the promise of stabilizing the prices of goods and services, there is a question mark over its implementation readiness through GSTN. It remains to be seen whether, the IT enabled GST functions properly that make significant progress to the tax systems of goods and services.