GST: What you should know

GST: What you should know

GST: What you should know

Hello everyone and welcome. Today I am going to share you a short info regarding the new GST Bill. GST has been a topic of conversation for quite some time now. Allow me to help you clear your doubts about the topic. Various taxes have been implemented on sales and purchases and for people to rather get confused due to all these taxes is very much possible. GST is supposed to bring a revolutionary change to the tax system of India and taking away the hardships faced by taxpayers. As a good man once said, “Having faith is moving forward”.

GST

What is GST?

GST is the Goods and Services tax implemented on various goods and services used by everyone. Before this new taxation system, India had a very complex chain of taxes that were levied on the various services and products. The basic idea of GST is to unify all these taxes into one single platform and also to make the process of tax paying hassle-free. Furthermore, it was launched on 30th June 2017 midnight. Now one of the other promises in addition that the bill offers is also to help curb the inflation rate. GST is not a new concept and furthermore, it was adopted by other countries many years back. Furthermore, a lot of problems were faced since the bill was not accepted right away. The bill was introduced by finance minister Arun Jaitely. and hence the GST bill was passed as we know it.

What is CGST, SGST and IGST?

Now you might have heard these terms too so let me make this simple for you. CGST or SGST and IGST are the types of GST. CGST or Central GST is the areas where the centre has power while SGST or State GST is the area where the state government has taxation powers. IGST or Integrated GST is for the movement of goods within the states of India. This would be collected by the union, later on, to be transferred to the states. To put in simple terms you can call GST as the simple tax. now, these are the types of GSTs that you will be seeing everyday, therefore, CGST and SGST are the most common of them all.

What is the constitutional amendment?

Well to make this simple consider constitution as a place where all the rules and regulations are made for the country. GST is the one hundred and twenty-second amendment bill 2014. The constitutional amendment changes the working of a country while other amendments modify the Constitution but GST rather changes the constitution hence it is a constitutional amendment bill. Hence to pass such a bill two third of votes from Rajya Sabha and Lok Sabha are required.

How are things simple with GST?

Now in the start of this post, we discussed that GST would make the tax system simpler. Here is a list of taxes that would be replaced by this new tax system.

  • Central Excise Duty
  • Service Tax
  • Countervailing duty
  • Special countervailing duty
  • Value added tax
  • Central sales tax (CST)
  • Octroi
  • Entertainment tax
  • Entry tax
  • Purchase tax
  • Luxury tax
  • Advertisement taxes
  • Tax applicable on Lotteries

What are these 0%, 5%, 12%, 18% and 28% rates?

The GST model has a rating system where goods and services will be categorised in different levels i.e. these rates mentioned above. Now, where do this rates apply while the goods are categorized according to these rates. Here are a few examples of various goods and services gst rates

0%

Food materials such as groceries(unpacked) and cereals and pulses. Services supporting the cultivation of crops.

GST

5%

Agarbatti, erasers, silk yarn, solar water heaters. Services like renting of motor cabs, transport by rail through first-class.

GST

12%

Food items like cheese, pig meat, fruit pulp and items such as feeding bottles. Transport of passengers by air in any class other than economy class, accommodation in hotels.

GST

18%

Condensed milk, Indian Katha, curry paste, natural and artificial mineral water. Research and development services and education services

GST

28%

Molasses, bubble gum not containing cocoa, chocolates, pan masala. Theme parks, water parks and accommodation in five-star hotels.

GST

Petroleum products, liquor and security services are exempted from this new tax system. In addition meat, fresh vegetables and fruits and also dairy products are also exempted. In addition, the goods and services tax rates all over the world are very less compared to India. A dedicated app was launched by the government on Android and IOS known as GST rate finder. Tax payers and also GST practioners can now register themselves on the new site that was launched by the government.

What would become cheaper and costlier?

According to experts, these things can probably become costlier:

  • Mobile bills, as a result, an increase in service tax
  • Personal care items
  • Gold jewellery
  • Tobacco products such as cigarettes and pan masala etc
  • Smartphones

       These things would probably become cheaper:

  • Movie tickets
  • Electronic items like air coolers, washing machines etc
  • Automobiles
  • Transport services
  • Paint and cement prices

So what would happen now that this simple tax is implemented will things finally become smoother or go rough. Almost everyone faces problems when they try something new. Now, lets hope that everything goes as planned, the common man is getting crushed in between all of this as prices of various goods and services have increased. most of all as a new era is starting lets all of us face it together. finally, what are your thoughts on all of this will gst make things better or worse? Let us know in the comments section below.

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