The impact of the Goods and Services Tax on the daily household is positive, according to the reports and research done during the one-year period of this crucial time, i.e. the implementation of GST.
In the overall scenario, household goods have become affordable, while on the other hand, household services are now pricier than before. After researching the complete household categories, let us draw some conclusions.
GST Impact on Food Products: According to the findings, the food items are now 1 per cent cheaper than the pre-GST era, as the GST rates on daily staples are 5 per cent (and 0 per cent for unbranded essentials). Also, one can notice the reduced rate on chocolates, as the earlier rate of 26 per cent is now down to 18 per cent (with some categories down to 5 per cent).
GST Impact on Cosmetics: Daily utility items including toothpaste, soap, hair oil and shampoo have seen further relief and are now taxed at 18 per cent / 5 per cent rate instead of the earlier charged 26 per cent. Apart from it, standard medicines are now taxed under the 5 per cent bracket (instead of earlier 12 per cent), while essential life-saving drugs carry 0 per cent GST.
GST Impact on Consumer Durable Items: The GST rate on consumer durable goods (like TVs, fridges, washing machines) has been rationalised down from 28 per cent to 18 per cent. But the turning point is that companies are now getting higher input tax credit, which makes the overall tax scenario lower than the previous one.
GST Impact on Services
- Restaurant Services Under GST: In the starting phase of GST, restaurants were put down in the 18 per cent slab rate, after which a nationwide protest made standalone restaurants move to the lower 5 per cent slab (without ITC).
- Telecom services under GST: After the inclusion of 18 per cent GST on telecom services, it went higher on the pockets of consumers, as the earlier rate was 15 per cent.
- Airline services under GST: The overall impact of GST on airline tickets is positive and cheaper, as the economy class is now taxed at 5 per cent. But the business class is taxed at 12 per cent, however, due to increased availability of input tax credit, the impact is less than predicted.
- Real estate under GST: Residential real estate transactions are now taxed at 1 per cent for affordable housing and 5 per cent for non-affordable housing (without ITC), down from the earlier effective rates.
- Financial services under GST: Financial services like banking transactions, insurance, etc. have gone up by 3 per cent (now at 18 per cent), which makes financial services more expensive than before.
