It has been just a few days that the GST (Goods and Service Tax) has been implemented, but it has already had a huge impact on the monthly budget of the middle-class people. The new tax scheme, which is now applicable to all the goods and services in the country, the prices system of the goods and products has also changed; while certain things have become costlier others have become cheaper. So, if you are preparing your monthly budget for the subsequent months or if you are dealing with the taxation, knowing the new price structure will greatly help you:
Gold, which is considered to be one of the most precious commodities has always been a priced possession for the middle-class people. The GST Council has fixed the tax rate of all the precious metals including Gold, Silver and Diamonds at 3%. Previously the VAT and the excise duty on gold in most states was capped at 1%, but with the GST in place, Gold has become costlier since July.
The premiums on automobiles, health insurance and term insurance with the government are likely to rise after the implementation of GST. Previously, the tax cap for insurance was 15%, which would now go up to 18% under the GST.
The transaction fees applied to various banking and financial services has been revised; it has now increased by 3% from the earlier tax rate which was 15%.
The GST rates will be different for different kinds of rooms and hotel; for instance, if you are going to stay in a room that has a tariff less than 1000 INR, then you do not have to pay any tax. On the contrary, if the tariff of the room that you are booking is between 1000 to 2500 INR, then the tax would be levied at a rate of 12%, while for rooms whose tariff is higher than 7500 INR, the tax applied would be 28%.
With the GST in place, the tax for restaurants and dine out places has been divided into two different slabs depending on their annual turnover and if they have the air-conditioning facility or not. Restaurants that have a turnover of less than 75 Lakhs INR will have a tax rate of 5% if they or for composition scheme. Eating places that do not have AC will be charged 12% tax on the food bill and the restaurants that have AC and serve liquor will levy a tax of 18%.
Drugs and Medicines
The GST will not have a great impact on the medicines and drugs; however, a tax rate of 5% will be levied on all the life-saving drugs for diseases like HIV-AIDS, malaria, diabetes and tuberculosis. Even though before GST, the drugs were exempted from all excise and custom duties, yet some states charged 5% tax on the life-saving drugs.