On July 1, the Goods and Services Tax (GST) will come into effect across India. The GST is the single largest tax reform India has undertaken since its Independence.
The GST, termed a potential game changer, is based on the concept of "one nation, one market, one tax." But what does this mean for you? How will it impact your monthly budget?
The cost of tea and coffee will see a marginal increase. Both are currently taxed at 3-4% which will be increased to 5% under GST. Aerated drinks will be more expensive as they will attract a 28% tax, as will tobacco and luxury goods. Processed food items are expected to cost less by being taxed at 5%, down from 10% currently.
Your phone bills will likely go up as the tax rate on telecom services will increase from 15% currently to 18%. Postpaid connection users having a bill of Rs. 1,000 will have to shell out Rs. 30 more. The talktime on a Rs. 100 prepaid voucher will decrease to Rs. 82 as compared to Rs. 85 currently.
Movie tickets priced below Rs. 100 will attract an 18% tax rate while others would be taxed at 28%. Whether the price of tickets would increase or decrease would depend on which state you live in as entertainment tax has been a state subject.
Ola and Uber cab rides, as well as AC train travel will cost less by attracting a GST rate of 5%. Traveling by air in economy class will be marginally cheaper as it attracts a 5% tax as compared to 5.6% previously. Business class travel flights will cost more with the higher 12% GST rate, compared to 8.4%.
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