GST Tex structure: Impact of Indian Economy and It’s Benefit

Thu 6 Jul 2017


11:35 am

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GST Tax Structure: Impact on Indian Economy and Its Benefit

After the Freedom of the India, GST is in more discussion than all types of taxation. During the 122nd Amendment bill; all the tax system of India has changed that is acquainted as GST (Goods and Services Tax) the biggest economic revolution ever since the independence of India. After hearing of GST tax system, all the businesses, Industries, commoner along with many government officials are confused that after all what is it, how it will impact on the economy and which kind of changes will it bring?

There is an unconsciously fearful atmosphere at all, we have to see, how central and state government deal with the situation arising after applied GST tax.   But we need to know this- After all what is GST and how it will impact on us? So let’s go further to know:-

What is GST?

GST is an integrated tax system through which the provision of a similar tax has been made for all the goods and things of the whole country. All indirect taxes, such like (Central and State Sales Tax, VAT, Entry Tax, Excise Duty, Entertainment Tax, Luxury Tax) Octroi etc has been abolished.  As per the Government opinion; this new tax system will simplify the tax process, taxes will decrease, with which the business world will benefit as well. 4 tariffs have been kept in GST; there is also provision for the addition of some cess on some things.  In the initial system, petrol, diesel, and liquor are excluded from the GST scope.

The government has not only increased taxes on things, in fact also decreased too. In addition to providing relief to the public, traders will also get relief on items which have been reduced in tax rates are as follows.

28% of 18% tax rate goods: – Government has reduced the rate of tax on students’ school bags, computer printers, dental wax, plastic Bed sphere, plastic tarpaulins, pre-cost concrete pipes, tractor components etc to the category of 18%. This will reduce the tax burden on the common man.

18% of 12% tax rate goods: – Similarly, the rate of tax on the Caltri and Exercise Book has been reduced to 18% to 12%.

12% to 5% tax rate: – Government reduce taxes on Cashew nuts, incense, and insulin 12% to 5%.


GST Tax-free items:

Government GST Under wheat, rice, other cereals, organic manure, seeds, agricultural equipment, pottery, vermilion, flour, gram flour, bread, flour, bread, flour, milk, curd, lassi, bangles, eggs, meat- Fish, honey, fruit-vegetables, offerings, salt, open cottage cheese, black / rock salt, Kumkum, Bindi  leaf leaves, stamp paper, court papers, postcards / envelopes, chalk, pencils, slates, Newsletters, newsletters, maps, Atlas, all kinds of contraceptives, to keep out of range of items Blood, listen machine so the public has been an attempt to provide relief |

Objects under 5% GST

GST Branded grains, branded flour, branded honey, sugar, tea, coffee, desserts, edible oils, kitchen gas, ration kerosene, coal, lignite, coke, coal gas, all other ores and concentrates, skimmed milk powder, baby milk food Rusk, pizza bread, toast bread, pastry mix, processed / frozen fruit-vegetables, canned paneer, dry fish, juice, sago, herbs, cloves, lentils sugar, nutmeg, life-saving medicines, stent, Blood vaccine, Crutch, wheelchairs, tricycles, Hepatitis detection kit, lifeboat, hand pumps and parts, solar water heaters, renewable energy device etc. All the items have been placed in the category of rates of 5%.

Objects under 12% GST

Salted Bhujia, butter oil, ghee, mobile, dry fruits, vegetable juices, soy juice, milk-containing drinks, incense, candles, Ayurvedic, Unani, Siddha-Homeo medicine, gauge, Bendez, plaster, orthopedic equipment, umbrella, walking stick, Fly ash bricks, carding, pencils, crayons, car, scooter, artwork, marble / granite blocks, ceramic products, steel, copper and aluminum utensils, electric vehicle, bicycle and parts, power Bicycle at ports items makes the toys, children’s drawing and coloring book, printed cards, glasses lens, biogas, paper boxes, kraft paper, Coir Mattress, LED lights, kitchen, and toilet ceramic items, tooth powder, processed/frozen meats -EEl, sewing machine needles, etc. 12% GST on all products Has been placed in the category.

Objects covered under 18% GST

GST hair oil, soap, toothpaste, corn flakes, pastry, cakes, food mixes, soft drinks, instant food, ice cream, jam, jelly, diabetic food, nicotine gum, mineral water, cotton pillow, register, Coir Mattress, account book, Notebook, Fountain Pen, napkins, tissue paper, toilet paper, handicapped car, goggles, the frame of the optical fiber, glasses, steel angle-bolts-tube glass bottles, jars, pots, Camera, Speaker, plastic products, helmet, placed cans, pipes, sheets, pesticides, biodiesel, LPG stoves, plastic tubes, pipes and household goods and Refractory cement in the range of 18%.

Objects Under 28 % GST

GST insulated wire, cable, aluminum door-window frames, light fittings, bath fittings, plastic floor coverings, tiles and ceramics products, mica, plaster, steel, ply board, putty, paint, varnish, cement, video game consoles, wig, watch, leather products, photocopy and fax machines, electric hotplates, electric heaters, printers, dishwashers, vacuum cleaner, TV, refrigerator, washing machine, foil paper, DI Rent, liquid soap, razor, shaving cream, sunscreen lotion, shampoo, chocolate, instant coffee, custard powder, hair dye / cream, powder, accessories Beauty / Makeup, Deodorant, skin care products, manicure / pedicure products, after-shave, Perfume etc. has been kept in the category of 28%.

Similarly, services are also divided into 4 parts based on tax rate which is as follows:

Services under 5% GST:- 5% GST on services in print media, leasing of aircraft, tour operator services, economy class tickets in a plane, cab service, AC train ticket, train or truck etc.

Services under 12% GST: train Container Freight, business class ticket in a plane, food in non-AC restaurant, rental of 1000 to 2500 rupees hotel, building or complex construction, temporary transfer of patent rights etc, all have been kept under 12%  in the tax net.

Services under 18% GST:  More than 250 cinema or drama tickets, composite supplies of works contract, circus, classical and folk dance, 2500 to 5000 rupees rental hotel, food catering in outdoor catering, restaurants with AC and liquor licenses, phone bills, Banks, Insurance and other financial services etc, these all has been kept in the tax net.

Services under 28% GST:  Gambling, rental hotels with more than Rs. 5000, hotel restaurants with five ratings or more rated, sporting events like IPL, casino, theme park, cinema ticket, ballet, water park, merry-go-round, golfing, racecourse etc. , these all above things have been kept in the tax net.

Apart from these, there are some products which will also have additional cess of 28% tax, let us know about those products.

  • Petrol car:  Less than 4 meters long and with less than 1200cc engine will have to pay 1% cess and total tax will be 29%.
  • Diesel car: Cars less than 4 meters long and less than 1500 cc engines will have to pay 3% cess and total tax will be 31%.
  • All other cars and SUV’s will have to pay a total of 43% tax with 15% cess.
  • A bike with more capacity than 350 cc has to pay 3% cess and the total tax will be 31%.
  • Private plane or yacht, increase 3% cess and total tax will be 31%
  • Cold drinks, Lemonade; increase 12% and total tax will be 40%
  • Non-tobacco pan masala, increase 60% cess and total tax will be 88%
  • Tobacco gutkha; increase 204%  total tax will be 232%

For traders with an annual trade of 20 million is not required to enroll in the GST, will come under the GST more than 20 million.

The details of last month’s business will be given on the 10th of every month: – Every Entrepreneurs and Merchant must be presented in the prescribed form 10th of every month.  The format for filing returns is available on the website. The invoice number to the traders, the buyer’s GST no. And the value of the goods or services sold will be filled in this format, depending on which refund will be received.

Traders can make a single bill throughout the day instead of less than 200 transactions, provided the goods are sold to the final consumer.

No need to be scared from GST: – Entrepreneurs and Merchants don’t need scared. The need for fear or anxiety is those who endorse the goods without bills, used input credit, tax has not been deposited on time, 3 month return is not filled, There will be a bailable warrant for tax evasion of 2 to 5 million and non-bailable offense for tax evasion of more than 50 million will be considered.

Benefit of GST

For the commoner, lots of the things are tax-free or less than 5% tax. Poor people get authority with surely. There will be equal opportunities for small traders in all parts of the country.

Trade and industry registration, Tax payments, filing returns and getting refunds will be easy. To eliminate all different-different of taxes and compresses in single tax that will be easier. GST will be very beneficial for Indian economy because by which A common national market will be created, Help in making India a ‘manufacturing hub’ With the rise in economic activity, opportunities for new jobs will be created.

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