How will it affect your monthly budget?

The much-hyped about Goods and Services Tax (GST) has been rolled out with effect from 1st July 2017. The tax is assumed to be the game changer regularity reform for all the industries. It is the single biggest tax reform that happened in the country in the past many decades and is based on the concept of “one nation, one tax.”

As per the GST rules, a standard rate has been fixed for 1211 items, keeping majority of them in the slab of 18%. The things which shall become cheaper under GST shall include eatables like curd, buttermilk, cheese etc., items of daily use like soaps, detergents, hair oils, LPG stove etc., stationery items, health care items, apparel and other things like air tickets, movie tickets, cement etc.

Another major benefit of GST is that the developers can claim input cost credit in order to offset the higher rates. Even though the works contract is kept under the slab of 18%, they will gain from the input tax credit allowed under the single unified taxation regime. Raw material like cement has been categorized in the 28% slab, but even then the companies will heave a sigh of relief as the packaged cement anyways came under an effective tax slab of 29-31%. Taxes on limestone, coal, and lignite have reduced to 5%.               

To conclude, this new tax by the Modi Government is going to affect each and every individual of the country as the prices of almost all the commodities are expected to change.