Your fries have probably become expensive. Burgers chains generally give contracts for potato farming. Contractual farming is taxable under GST where farmers leasing out their lands have to pay 18% GST. Farmers selling their produce under a brand name will be charged GST at 5%.
Farmers selling their produce freely without a brand name won’t be taxed. However, if the farmer sells the farm products under a brand name, a GST of 5% will be charged. Raw agricultural commodities such as wheat and grains will remain exempt from tax whereas processed commodities shall be taxable. Hence all farmers aren’t liable to pay GST although produce buyers may need to collect the tax on a reverse charge basis.
Meat and eggs, dairy products such as milk, buttermilk and curd, fresh fruits and vegetables and kitchen staples such as flour, besan, bread and salt are exempt from tax. Vendors selling these cannot claim input tax credit for selling them.
Movie tickets costing more than Rs. 100 attract a GST of 28% and food and beverages are taxed at 18%. Although Entertainment tax has been eliminated after GST, the local bodies still levy an additional tax. The effective entertainment tax has risen to 48%-53%.
Aerated drinks have been classified as demerit goods and attract a sin tax of 28% along with an additional cess of 15%. This ‘Sin’dulgence will cost you a little more than the excess sugar in your blood stream.
E-commerce firms are required to collect a 1% tax at source from the sales on their platform. The tax collection at source (TCS) guideline under GST will increase the administration and documentation workload for e-Commerce firms. This provision will not come into effect before April 2018.
The GST rate for luxury cars and SUVs was lower as compared to the previous tax rate. The demand went up and the automotive companies supplied. The tax rates were lower than the combined central and state taxes in pre-GST period. To fix this anomaly, the Council raised the cess.
Shopaholics are facing withdrawal as textile costs have shot up. Branded apparels priced at Rs 1,000 or above attract 12 per cent GST, while those below this threshold suffer 5 per cent. The consumers have shifted towards low-priced clothes.
The next time you’re at Nike or Adidas’ Factory outlet, don’t feel shy to buy your favourite jerseys in bulk. Manmade fibres such as nylon, rayon, polyester fibre has been affected positively since a GST of 12% is levied.
The curve-ball named Jio had already wrecked other telecoms customer base. GST rate for mobile recharge is 18% which is higher than the previous 15%. Network services providers have come up with attractive combo offers to prevent their clients from switching to competitors.
Healthcare was exempt from taxes under the previous tax structure and remains exempt under GST. Making healthcare and medicinal drugs affordable has long been the goal of the Indian Government. Therefore, healthcare is out of the GST net.
Medicines are often very costly depending on the ailment. Many middle class people have to opt for cheaper, less effective alternatives. Direct sale of imported life-saving medicines is exempt under GST. Contraceptives & human blood have 0% GST. Most tablets, capsules, ayurvedhic medicines & liquids are taxed at 12%. Medicines which attracted a VAT of 5% attract a 5%GST now.
The beauty of e-commerce: we can shop from Kerala while sitting in our living rooms. The benefit of shopping from Kerala was the lower VAT rate compared to the state that you were in. Hence the product from Kerala was cheaper than the same product in your local market. GST has turned India into a common tax market, taking away the price advantage due to tax arbitrage.
Loved that dress but couldn’t order it online because it couldn’t be delivered to your state? GST will make that wish come true. Since the nature of the E-Commerce business is such that the seller expects orders from every state, the operators have to register in every state. Also, with removal of toll nakas, your orders will be delivered sooner.
In the previous Indian indirect law there were very few Zero Rated Products. GST has brought certain essential items like food grains and books under the tax bracket of 0%, hence the name Zero Rated Products. Zero rated supply refers to the items that are taxable but the tax rate is 0% which brings down the cost of the item. Input credit refunds relating to such supplies can be availed
Hotel rooms with a rent of less than Rs. 7,500 will be taxed at 5% whereas rooms with rent more than that will be taxed at 18%, without the distinction of AC and non-AC. This rate is lower as compared to the GST rate on hospitality industry in other countries.
Seeing a plethora of taxes boggles our minds. Besides service tax and VAT, we there were other taxes being levied on the final bill amount and we rarely knew why they were there. Well thankfully, figuring out taxes isn’t rocket science anymore. GST has replaced all previous taxes bringing in administrative ease. The customer also has a clear idea of the cost they are incurring
Education is important for country’s economic progress and a priority for the Government. Academic services (excluding coaching) are exempt from GST levy. However, a GST of 18% has been imposed on services provided by higher education institutions and universities (public & private). On the other hand, exercise books, notebooks, and crayons are taxed at 12%. Pens and school bags are taxed at 18%.
Nobody can deny that living in hotels gives a pleasure of its own. Every good thing comes at a price and this pleasure is going to get costlier. Although GST on rooms costing less than Rs. 7,500 is 5%, they cannot claim Input Tax Credit. Also, the technical & compliance costs have increased which will add to the final bill amount.
If we focus on an issue that’s closer to our stomach and wallets than to our hearts, a fine dining experience now costs lesser. The effective tax rate earlier was around 20.5% and has come down to 18%. The restaurant owners get the option to set off the output liability against the input liability as the goods and services are taxed uniformly.