For quite sometime now, The Goods and Services Tax (GST) has become a ‘bugbear’ for the countrymen. Everyone is anxiously waiting for it to get introduced, for one of the major reasons being, that there is certainly no escape from it! With mere few hours left for GST rollout, majority of the taxpayers are in dilemma as how the new tax regime will take off. Well, we must keep our hopes high that the GST roll out would not be similar to the surgical strike on black money, wherein after demonetization the 500 and 1000 rs currency notes became invalid and its aftermath affects were more hazardous. Several people lost their lives in the long bank queues to deposit the old currency notes and many got injured while getting the new ones to make their ends meet. The countdown has begun, and its time to see what GST brings along…
One and all in the country, including accountants, professionals, service class, businessmen, small entrepreneurs and all those who pay tax in a way or the other are just imagining about the changes that would be after GST. So what would be the effects of GST on Tax payers?
Here’s what GST would do to the Tax payers?
Though the current government is putting its best foot forward to bring in the change but somehow GST still look like an un-organised affair. The roll out of GST would undeniably bring bagful of changes but on ground zero the implementation of GST and its effects are going to be much different. What can be the major concerns that might create a huge chaos in the implementation of GST, let’s find out?
- Till now, there is no clarity on area based exemption units.
- There is no clarity on reimbursement mechanism which is going to be introduced in place of area based exemptions.
- No proper channelization or menus have been laid down for such units.
- Alike government’s step of demonetization in GST too the government is changing the respective laws every now and then.
- The GST rules issued earlier by the GST Council have been totally revamped by notification no 10/2017 issued a day before on June 28.
- There are certain tweets, but no official notification has been issued about penalizing defaulter tax payers.
- No proper format of application is available on the public platform for the taxpayers covered under reverse charge mechanism.
Effect of GST on online shopping?
- It is expected that shopping online is going to be a costly affair post-July 1.
- After the implementation of GST, tax would be collected at a fixed rate of 1 per cent ad hoc tax from traders and this fixed rate parameter is going to make online shopping expensive.
- However, online orders are expected to reach the consumer faster after July 1 due to less paperwork.
- GST will bring transparency on the taxes levied on the supply of goods and services.
- It is expected to improve the ease of doing business.
- Besides boosting country’s GDP growth it is also expected to improve tax compliance.
Effect of GST on automobile?
- On-road price of the vehicles could drop by 8 per cent.
- It is expected that two-wheeler, with less than 350cc engine, would cost a little less.
- It is expected that the two-wheeler with more than 350cc engine would attract 3 % cess.
- Luxury cars are expected to be cheaper.
Effect of GST on electronics?
- Duty on manufactured goods is expected to go up from existing 14-15 per cent to 18 per cent.
- The increase in existing duty would hit the consumer badly as the cost of electronics such as laptops, mobile phones et al is expected to shoot up.
Effect of GST on Telecom industry?
- It seems that service provider such as Reliance Comm, Bharti Airtel and Idea are going to be hit badly if tax rate in the GST regime exceeds 15 per cent.
- The tax rate increase would effect the consumer as call rates and data rates are expected to go up.
Effect of GST on Household goods?
- The implementation of GST may bring down the cost of soaps, hair oil, toothpaste and malted beverages.
- Though skin creams, detergent, chocolates and shampoo prices may go up.
- Milk, cereals and grain are expected to be exempted from GST.
- Products like tea, sugar, coffee, edible oil etc are expected to attract mere 5 per cent GST.
Other major areas where GST would have its effect
- Air fare expected to go up.
- Watching movies at multiplexes expected to cost less.
- DTH services expected to get cheaper.
- Insurance policies to get costlier.
With last few hours left for the next big change in the country, all the major market players in all the arenas are wooing the consumers to clear up their stocks. It’s time to make hay while the sun shines while keeping the hopes high for a better future because none of us knows what lies in store for us tomorrow…
Source: The Economic Times