GST 2.0: A day in the life, with new tax regime


NEW DELHI: Even if you aren’t a GST registered taxpayer, your daily life changed irrevocably on July 1, 2017 when India’s new indirect tax regime came into force — that changed the premise of taxation from the source or origin, to destination. As the tax regime completes two years in operation (GST 2.0), let’s see how it impacted businesses and our day-to-day activities.

A good start: Well, it certainly became cheaper to maintain personal hygiene with both soap and toothpaste attracting a lower tax slab post-GST implementation — from 27% to 18% each. Shampoos, which initially became expensive when GST was implemented — with their tax increasing from 24-25% pre-GST to 28% — saw them coming under the 18% tax ultimately, while women’s personal hygiene products like sanitary napkins, which initially came under the 12% slab under GST, compared to 13.68% in the pre-GST regime, are now in the 0% slab, thanks to the issue becoming a political hot potato for the Modi government.

Getting ready: Well, power dressing has certainly become a costly affair after GST rollout, depending on whether the shirt, blouse or saree you bought was less than Rs 1,000 or more than that. Considering that most branded apparels are priced way above Rs 1,000, you end up paying 12% tax as against 2% tax earlier. Shoes, though, became a bit cheaper — while before GST, they attracted a tax of 21%, if priced above Rs 1,000, which most branded footwear is in any case, post GST, the tax slab applicable is 18%.

Eating in & eating out: Well, unless you are buying wheat directly from the farmer and making flour out of it, your parathas made from branded wheat flour are now more expensive, by 5% — compared to the earlier VAT which was 2% and that too, implemented in some states. Of course, if you wish to save some money, you could buy unbranded flour or rice. As for your love life, depending on which state you live in, you are either paying more or less because of GST — while movie tickets in states like Punjab and Rajasthan didn’t carry any entertainment tax pre-GST and thus became expensive by 28%, followed by a reduction to 18%, in states like Jharkhand, a multiplex ticket is far more affordable, given that the state charged 110% entertainment tax before July 1, 2017.

Dining out — unless you’re the one who will only be seen in five star establishments, in which case you can certainly afford the 28% GST — has become progressively cheaper, with stand-alone restaurants falling in the 5% tax slab. That’s an improvement from a plethora of taxes — such as the 14.5% VAT, along with the 14% Service Tax, not to mention the cesses on them — which were added to the bill in the pre-GST era.

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