Get Ready For GST.
What is GST.
On Wednesday Loksabha gave approval for GST which is applicable from July 1 2017.(Good & Services tax)
Now what a common person will get from GST.
130 crore of population having 29 states & 7 union territories. Each state having different industries where some are having or some are not having industries.
Administration of India is divided in 3 types 1. Centre 2. State 3. Muncipal.
It is difficult to collect tax from each person so there are Indirect taxes through Industries, Shops, & Businessman. Centre puts a. Excise duty b. custom duty & c. services tax. State puts a. Vat b. Octroi & c. Entertainment . Where municipality puts different local taxes .
According to a survey transportation rate in India is 200 to 300 Km where it is 500 Km in other countries, because of the different tax structure in every state.
Still in India there is a confusion while paying tax is what is product & what is service . The industrialist needs to pay Excise duty when product manufactures, but without deducting it again Vat is paid . so there there is increase in price to end user. The GST proposal is to correct the current tax slabs as the product to get as minimum cost to customer.
Every Industrialist needs to purchase raw product from other states which has 2% of concession which is now not available. There are taxes on Imported products called CVD & SAD which are refundable on certain formalities, but the procedure is so complicated that none ask for it. IGST is new tax which has input credit tax.
GST council has decided tax slabs as 0%,5%,12% 18% & 28%. The new Tax Structure for different categories.
If the product is taxfree in one state but having taxes in another state will have to put taxes in all the states so the product which don’t have tax now may be costlier.
Medical products already includes Excise & Vat.
Petrol & Diesel is not included in GST list.
Fast moving consuming Goods like soaps, deos, perfumes, washing soaps may attract 18% or 28% of the taxes .
Telecom & Banking sector already have 15% of taxes . it may be got to 18% in the future.
Except furniture all the household goods like refrigerator, TV are Manufactured in the factory where furniture can be made anywhere. manufacturing industry included in the 22- 23% of tax slab structure. There are chances to reduce tax on construction material to boost the sector.
On Coldrink/ Alcohol/ cigarettes there are chances to increase taxes by 40%.
Real Estate and GST
As reported Real Estate is Second largest employer after agriculture is facing multiple tax issues such as VAT, Service Tax, Stampduty & registrations charges.
There are many cost involved on the developers side such as customs duty, central Sales Tax, excise duty, entry tax, etc. These are subsequently passed on to the final pricing of the units and, thereby, to the buyer.
The GST states that any tenancy, lease, license to occupy land, or easement will be considered as supply of service. Any lease or letting out of a residential, industrial or commercial building for commercial purposes.
Simultaneously, the sale of land or building (except the sale of under-construction buildings) will not be treated as either supply of goods or services.
Till now nobody has the idea which product price will become cheap or costlier let’s hope the new GST bill may reduce the complications in buying any product or service.