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GST influence: Here’s a look at how it affects electronics, services and automobile

GST influence: Here’s a look at how it affects electronics, services and automobile

Soon after the Goods and Services Tax (GST) was approved in the Lok Sabha, the GST Council has now cleared framework rules to shed more light on finer details related to the rates that will be applicable on different goods and services. For those wondering what is this GST all about, it is essentially a proposed system of merging most of the existing taxes into a single taxation system. The fresh centralized tax system (GST) will substitute a number of indirect taxes that are presently applicable, thus also easing the overall taxation process.

GST will be spinned out from July one 2017, and ahead of that, the government has categorized a total of 1,211 items, placed under different tax slabs. Yes, GST was expected to bring one single tax system, but turns out, there will be a total of five slabs – zero percent, five percent, twelve percent, eighteen percent and twenty eight percent.

We spoke to CounterPoint Research analyst Neil Shah to understand the fresh taxation, and how it will affect the prices. So, if you are wondering which electronics products are getting cheaper and what all products are getting dearer, we have compiled a list to make things lighter for you.

GST influence on consumer electronics

With all the indirect taxes, a tax of around 13.Five percent is presently levied on smartphones, but with GST, it will come down to twelve percent. This will make smartphones a bit cheaper than they are right now. Don’t expect a drastic fall, but some marginal fall will be there. The components used for making smartphones are also categorized in the twelve percent price bracket. ALSO READ: DoT closely watching influence of 18% GST on the sector: Manoj Sinha

If government determines to give further incentives and entertainment for ‘Make in India’ products, the cost can come down a bit more. So, if they are made in India, they are likely to get even cheaper.

Cameras, speakers, monitors, TVs

The likes of point-and-shoot or a DSLR camera, TV, speakers, computers and monitors will now be levied a tax of eighteen percent, making them a bit more expensive. Even laptops fall under the same slab, and their prices are also set to go up marginally. ALSO READ: Demonetization, GST to help software developer community in India: Microsoft’s Narendra Bhandari

All electronics appliances, such as washing machines, refrigerators, vacuum cleaners, shavers, trimmers, dishwashers, water heater, mixers, toasters, weighing machines are categorized under twenty eight percent GST slab, and their prices are set to become dearer.

Buying a motorcycle is set to get dearer, as it is set to attract a tax of twenty eight percent. For cars, on top of GST, they will also attract cess ranging inbetween 1-15 percent. Puny cars attract one percent cess, mid-sized cards will attract three percent cess, whereas luxury cars will peak at fifteen percent cess. ALSO READ: GST influence: Mercedes-Benz cuts prices of ‘Made in India’ cars by up to 4%

So what does this mean? Well, petite cars presently attract tax of twenty nine percent, but with twenty eight percent GST and one percent cess, the price remains unchanged. Mid-sized cars will slightly cost more, however, the real benefit will be for luxury car buyers. Presently, luxury cars attract tax inbetween 52-55 percent, but with GST and cess, it will come down to forty three percent, making them relatively cheaper.

GST influence on services

With GST implementation, transport services are set to get a bit cheaper. Whether you are hiring an Ola or Uber cab, travelling via railways or via air (economy class), these services will attract a GST of five percent, which will make them marginally cheaper than what you presently pay. However, business class air tickets will fall under twelve percent slab, making them a bit more expensive.

Telephone, DTH bills

Presently, we pay a tax of around 14.Five percent tax on mobile and landline bills, DTH and broadband bills. But after GST implementation, it is set to go up to eighteen percent, and thus also marginally increase your mobile bills. In case of prepaid, if a top-up of Rs one hundred gives you talk time of about Rs 85, post GST, it will marginally come down to Rs 82.

Presently, movie going practice is pretty expensive, as the entertainment tax is about 35-40 percent depending from state-to-state. However, after GST, it will come under twenty eight percent tax slab, making your movie watching practice slightly affordable.

So there you are, while some goods and services are set to become affordable, others are set to get expensive. We would like to know from our readers on what they think about GST. Feel free to drop in your thoughts in the comments section below.

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