With the Rajya Sabha passing all the four GST bills in the parliament a week back, the nation’s biggest and revolutionary tax regime GST (Goods and Services Tax) is all set to become a reality soon. Boasted as the most subversive tax reform in the country after independence, GST is expected to curb transactional costs by introducing a unified tax system stirring economic growth in the long run.
With the prospects that GST would improve the GDP by a couple of percentages, the reform in its entirety might come with` a mixed bag of surprises for the common man. Talking about its long-term impact, GST should mark a positive impact on most sectors.
Based on the GST implementation experience derived from other nations, India might experience an inflationary impact especially during the transition stage, which is expected to fade with the rollout of measures such as anti-profiteering. Yes, with the inclusion of anti-profiteering along with other counteractive measures, GST should lead to reduced cost for most of the supplies to the end-users in the long-run.
Here’s a quick look at what the GST could mean for the common man:
• Mobile phone bills
• Premiums for life insurance plans
• Investment management and banking services
• Online ticket booking services
• Basic luxuries such as DTH services
• Residential rentals
• School and educational fees
• Rail/metro commute
• Courier service
• As the GST council has decided to include entertainment taxes in GST, movie tickets might turn cheaper in most of the states across the country.
• Dining out in restaurants/hotels may turn pocket-friendly in several states.
Under the GST tax system and the current supply chain ecosystem, the following might get cheaper:
• Two wheelers
• Luxury and SUV or premium cars
• Entry level sedans excluding small cars
Basis of the current supply chain landscape and other associated direct taxes, the common man can expect marginal impact on white goods such as:
• Washing machines
The government with its determined outlook towards injurious/sin goods, proposed a high tax rate on ‘sin goods’ that include cigarettes, aerated drinks and tobacco products. With a higher tax rate of around 40%, these goods may witness steep rise in their prices.