GST -- what it means for consumers

Tonight India ushers in a landmark reform in indirect tax regime by rolling out the GST (Goods and Services Tax).

In fact, the whole process of reforming our tax structure had begun many many years ago; and whenever any government moved forward in this direction, all political parties "played politics". And today, we have politics in full action, many opposition parties are boycotting the special parliament session.

My understanding is that in the long run GST is going to do good for our economy: one, evading taxes will become more difficult; two, taxes won't be a taxing thing. There are many more advantages that GST will ring in. At the same time, any initiative is bound to have its flipside. I feel it's our call to see and leverage the positives, rather than harp on the negatives.

For a vast country like India with multiple laws governing goods and services in different states, this transition to a common tax regimen, isn't by any means going to be easy. But I am sure we will get used to this in a few months, if not earlier.

Here below is a very easy-to-understand table compiled by KPMG, which explains how GST will impact us, consumers, in terms of prices.


Tax %	Goods	Services
No tax – 0%	Jute, fresh meat, fish chicken, eggs, milk, butter milk, curd, natural honey, fresh fruits and vegetables, Cereal grains hulled, Palmyra jaggery, flour, besan, bread, prasad, salt – all types Bindi, sindoor, bangles, kajal, handlooms Stamps, judicial papers, printed books, newspapers, Bones and horn cores, bone grist, bone meal, hoof meal, horn meal Children's' picture, drawing or colouring books, human hair	Hotels and lodges with tariff below Rs 1,000, Grandfathering service has been exempted under GST. Rough precious and semi-precious stones will attract GST rate of 0.25 per cent
5%	Fish fillet, cream, skimmed milk powder, branded paneer, frozen vegetables, coffee, tea, spices, pizza bread, rusk, sabudana, Cashew nut, Cashew nut in shell, Raisin, Ice and snow Apparel below Rs 1,000, packaged food items, footwear below Rs 500, Medicines, stent, Insulin, lifeboats Kerosene, coal, bio gas, agarbatti, kites Postage or revenue stamps, stamp-post marks, first-day covers	Transport services (Railways, air transport) - because their main input is petroleum, which is outside GST ambit Small restaurants
12%	Apparel above Rs 1000, frozen meat products , butter, cheese, ghee, dry fruits in packaged form, animal fat, sausage, fruit juices, bhujia, namkeen, ketchup & sauces, Ayurvedic medicines Tooth powder, agarbatti Colouring books, picture books, exercise books and note books umbrella, sewing machine, cellphones All diagnostic kits and reagents, Spoons, forks, ladles, skimmers, cake servers, fish knives, tongs	State-run lotteries Non-AC hotels, business class air ticket Fertilizers Work Contracts
18%	Footwear costing more than Rs 500 Bidi Patta Biscuits (All catogories), flavoured refined sugar, pasta, cornflakes, pastries and cakes, preserved vegetables, jams, sauces, soups, ice cream, instant food mixes Mineral water, tissues, envelopes Tampons Note books Steel products Printed circuits Camera, speakers and monitors Kajal pencil sticks Headgear	AC hotels that serve liquor Telecom and IT services Branded garments Financial services Room tariffs between Rs 2,500 and Rs 7,500 Restaurants inside five-star hotels
28%	Bidis, chewing gum, molasses, chocolate not containing cocoa, waffles and wafers coated with chocolate, pan masala Aerated water Paint, deodorants, shaving creams, after shave, hair shampoo, dye, sunscreen Wallpaper, ceramic tiles, water heater, dishwasher, weighing machine, washing machine ATM, vending machines, vacuum cleaner, shavers, hair clippers, automobiles, motorcycles, aircraft for personal use	Private-run lotteries authorised by the states Hotels with room tariffs above Rs 7,500 5-star hotels Race club betting Cinema
Key Facts about GST	81% items to be taxed below 18% tax slabs The GST would be applicable on the supply of goods or services as against the present concept of tax on the manufacture or sale of goods or provision of services The GST would apply to all goods other than alcoholic liquor for human consumption and five petroleum products, viz. petroleum crude, motor spirit (petrol), high speed diesel, natural gas and aviation turbine fuel
	At the Central level, the following taxes are being subsumed: Central Excise Duty, Additional Excise Duty, Service Tax, Additional Customs Duty commonly known as Countervailing Duty, and Special Additional Duty of Customs
	At the State level, the following taxes are being subsumed: Subsuming of State Value Added Tax/Sales Tax Entertainment Tax (other than the tax levied by the local bodies), Central Sales Tax (levied by the Centre and collected by the States) Octroi and Entry tax Purchase Tax Luxury tax, and Taxes on lottery, betting and gambling


FACTOIDS – WHAT'S UP, WHAT'S DOWN
Sector	What's got costlier	What's got cheaper	What saw no change
AUTOMOBILES 28% GST + CESS	Small cars	Luxury cars/SUVs 2 Wheelers	Mid size cars
HOME APPLIANCES GST: 28%	ACs, TVs & Washing machines
TRAVEL SERVICES	AC Train Travel Business Class Airfare	Economy airfare Uber/Ila Metro/Suburban rides
GOLD JEWELLERY GST: 3%	Gold - Opens window for cheap jewellery imports from Indonesia & South Korea
TELECOM & CONSUMER TECHNOLOGY	Mobile Phones Wi-fi services Telecom services
SERVICES	Life Insurance premiums Banking services Investment management services Online bookings Business Class airfare DTH services Courier services Wi-fi services	Watching movies Ola, Uber services Metro travel Suburban train travel Economy airfare Religious travel
WHAT GST MEANS FOR YOU
WHAT'S COSTLIER? Small cars Tea/coffee/masalas Shampoos/Deos Gambling/betting Metals/cement Aerated drinks Tobacco Courier services Insurance premiums Banking charges	WHO GETS TAXED WHAT? GST has 4 basic tax rates 5%, 12%, 18% & 28% Basic staples (foodgrain, milk, veg) are tax exempt No tax on services like education & health	GST: WHAT'S THE CHANGE? Pre-GST: 17+ state and central taxes on goods and services GST: Single tax with 4 basic rates Pre-GST: Multiple taxes at different rates GST: Single tax at point of consumption
The GST CLUB and ANALYSIS across countries/continents
THE GST CLUB 160 countries have GST India's rate among the highest (28% the top slab) Scandinavian countries have highest single rate of 25% Uruguay & Argentina follow with 22% and 21%		GST COMPARISON Global VAT/GST rates: South East Asia: 7% Asia: 12.8% Europe & CIS: 19.8% Africa: 16.8% Latin America: 15.7%