Goods and Service Tax (GST) is now a reality. Last night, President Pranab Mukherjee and Prime Minister Narendra Modi along with other eminent dignitiries launched the new tax structure at Central Hall.
The tax rates under GST for all products and services will be at 5%, 8%, 18% and 28%. Last month in a GST Council meet, Finance Minister Arun Jaitley had released a list of products that are termed 'essential' and will attract 0% the new tax structure.
With GST coming into effect, your monthly household budget is set to take a hit and it will increase marginally.
Basic household commodities of a comman man would include groceries, electricity bill, telephone bill, water bill, sanitary items, and washing powder. Groceries like milk, paneer (not packaged), curd (not packaged), rice, and wheat are kept under the 0% bracket, as these items are basic needs of a common man.
However, cheese is also now common in an Indian household, but it will still be charged at the rate of 18%, which will certainly increase in price under GST. Shampoo and washing powder will be charged at a rate of 28%, and will be expensive under GST. Electricity and water bill would not be affected under GST, as there are out of the purview of GST.
Although telephone bill will be charged GST at the rate of 18%, which will increase the liability of the person, as the current service tax rate is applicable at the rate of 15%. Long-term investments like fridge, air conditioner, and microwave are likely to cost higher under GST, as they have been placed under the 28% bracket.
"Due to the initial inflation expected under GST, there might be an increase in the prices of a few household products, which will get neutralized by the start of the next year," Archit Gupta, Founder & CEO ClearTax said.
Here's how it will be like:
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.