GST, which is believed to be the biggest tax reform since independence, is going to come into effect from 1 July. A grand opening ceremony of GSATA is being organized in the central chamber of the Parliament midnight on June 30. Here, there are various kinds of things about the effect of the GST on the impact of the general public's budget. Actually, a large number of GST products and services will now be replaced by the Central and State taxes, including Value Added Tax (VAT) and Central Sales Tax. It is expected that GST will transform the entire country into a single common market, where smooth flow of goods and services across the boundaries of states will be possible. It is also estimated that this tax reform will increase the country's GDP from 1.5 to 2 percent. Now services like medical and education free of service tax are also excluded from the GST scope. Likewise, GST will not be used on items like food grains, vegetables and milk.
According to Santosh Dalvi, partner of Indirect Tax, in the advisory firm KPMG India, GST aims to keep inflation under control. He said, 'This means that the prices of all the products and services should be lowered from medium to long term.' GST is quite straightforward and clear. Its purpose is to increase government revenue by ensuring the compulsion of taxation. This will also reduce the extra burden of taxes and also bring benefits to the customers. But, how much will GST clearly affect your monthly budget? Will you be able to save a little more money or will you have to spend more for the same services? And yes, what will be the effect of GST on banking and medicines? Let's see.
5% GST is required for restaurants with annual turnover of less than Rs. 75 lakhs. This means that eating here will be a little cheaper in the first place. On the other hand, feeding in non-air conditioned restaurants will be a bit expensive because earlier it was 6 percent VAT, but now GST will be 12 percent. As far as the air-conditioned restaurants are concerned, the food here is also estimated to be expensive. That's because 18 percent GST will be given here. However, there are still both service tax and VAT on the food here.
According to Santosh Dalvi, partner of Indirect Tax, in the advisory firm KPMG India, GST aims to keep inflation under control. He said, 'This means that the prices of all the products and services should be lowered from medium to long term.' GST is quite straightforward and clear. Its purpose is to increase government revenue by ensuring the compulsion of taxation. This will also reduce the extra burden of taxes and also bring benefits to the customers. But, how much will GST clearly affect your monthly budget? Will you be able to save a little more money or will you have to spend more for the same services? And yes, what will be the effect of GST on banking and medicines? Let's see.
5% GST is required for restaurants with annual turnover of less than Rs. 75 lakhs. This means that eating here will be a little cheaper in the first place. On the other hand, feeding in non-air conditioned restaurants will be a bit expensive because earlier it was 6 percent VAT, but now GST will be 12 percent. As far as the air-conditioned restaurants are concerned, the food here is also estimated to be expensive. That's because 18 percent GST will be given here. However, there are still both service tax and VAT on the food here.
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