How GST Will Impact Common Man: 10 Things You Should Know

30 Jan 2017, 04:47 PM IST

The GST Council has agreed upon a four-tier tax structure under Goods and Services Tax.

The GST Council has agreed upon a four-tier tax structure under GST with tax slabs of 5 per cent, 12 per cent, 18 per cent and 28 per cent.
A four-slab tax structure is likely to make various goods under GST cheaper, while many other types of goods will become expensive.
According to reports, essential items including food, which currently constitute around half of the consumer inflation basket, will be taxed at zero rate.
The lowest rate of 5 per cent would be for common use items while there would be two standard rates of 12 per cent and 18 per cent under the GST.
It is likely that the services would be charged at 18 per cent making eating out in air conditioned restaurants, booking air/railways tickets, DTH and mobile services cheaper.
Services contribute nearly 60 per cent of India's $2.08-trillion economy.
The higher rate under GST is likely to be applicable for items that are currently taxed at 30-31 per cent.
The government has not yet finalised the tax rate to be charge on gold.
According to Finance Minister Arun Jaitley, several manufactured items including most white goods (such as refrigerator, washing machine etc.) are taxed at an excise rate of 12.5 per cent and VAT of 14.5 per cent. Along with the cascading effect, these items are taxed at a combined 30-31 per cent, he has said. These items will be taxed at 28 per cent.
A cess would be levied on products such as tobacco, luxury cars and aerated drinks on top of the 28 per cent tax bracket.