After a lot of reading and research, I could understand the basics of GST. Hope this will help all the moms in maintaining their home budgets accordingly.
Here’s my GST guide for Moms:
Things like cereals, flours, fresh fruits and vegetables do not come under GST, they are exempted. In dairy products, sugar, tea and coffee powder, there is no significant rate change.
For eating out, the tax depends on how big the restaurant is, presence of Air-conditioning, turnover of the restaurant and on. For small and medium restaurants, the tax slab has gone down. However, for 5 star hotels it has gone up to 25%. This shows that the government has decided to cull out more from the pockets of those who can afford.
2. Clothes and Footwear
Readymade garments fall under the upper 12% bracket whereas apparel below INR 1000 are in the 5% tax bracket.
Most of us like to have a variety of shoes, isn’t it? We love those shoes with heels, floaters, flats, sandals, sneakers, ballerinas and the list can go on and on! So, I had to check this... For footwear worth up to INR 500 are at the lowest tax slab of 5% while those priced at higher than INR 500 are fixed at the higher 18%.
With GST coming in, the disparity in taxes on certain goods will end. Let’s take Gold, for example. In pre-GST era, gold was taxed at 2.2% excise and VAT in Maharashtra and Delhi. With GST coming in, gold will now be costlier in these states and getting cheaper in Kerala as it was taxed at 5%. Now with GST coming in, a flat rate of 3% will be applicable nationally.
4. Toys and sports equipments
GST hasn’t been very kind to kids’ items though. Electronic toys, gaming consoles and even board games will be charged at 28%. The toy manufacturers are still fighting to get some tax relaxation at least in traditional toys like carom and chess among others.
5. Healthcare and Education
One important sector being exempted from GST is healthcare and education services.
6. Real Estate
Affordable housing schemes as well as under-construction projects will come under 12% Slab. Under-construction projects might get marginally cheaper in the affordable segment.
For ready to move in projects, rent or lease, either for residential or commercial projects, the prices might increase with the application of GST.
While electricity is exempted from GST, it will apply to water, although at a concessional rate. Phone bills will go up with GST, applicable at 18%. For well-maintained housing societies, if the monthly maintenance charge is more than 500 Rs. Then the 18% GST slab will be applicable.
This tax reform through implementation of Good and Services Tax (GST) is the largest of its kind post-independence and is still at a very nascent stage. With the motto of one country one tax, it will put us at par with nations with more structured tax systems.
This is what I have understood, hope this clears the confusion about GST and about the things that matters to us. So, in crux this is GST guide for Moms.
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