GST tax rates, 2017 and why they matter
The much awaited GST tax rates (Goods and Services Tax) are about to be fixed. The GST council will decide the rates on all the goods (from salt to luxury cars) and services(phone calls to dining out) has begun its meetings and the first set of GST tax rates rates are out.
The complete GST framework will be rolled out on 1st of July 2017, which rings bells for a complete financial transformation in the country.
The Tax Slabs :
The Roll out so far has been in four slabs of 0%, 5%, 12%, 18%, 28% across 1211 items.
0% Tax :
In a first, all food items and grains are kept in the 0% bracket. This means the regular daily food is tax-free and will bring down the costs for consumers. Also, legal papers like stamps and judicial material, printed books fall into this category making them accessible to the common man at low rates.
5% Tax :
A tax of 5% will be levied on processed food in the daily needs. Also, essential medical goods like a stent, lifeboats, etc to be kept in this brackets thus making sure that these goods are available to everyone in need.
12% Tax :
One may have to use the mobile phones carefully as a new phone will cost them dearer with mobiles being put under the 12% tax bracket. iPhones may get cheaper vis a vis local brands.
18% Tax :
The FMCG sector should cheer as their sales will go up with FMCG goods becoming cheaper after being pegged at under 18% tax bracket. Similarly, branded goods are kept to 18% tax as compared to current levels of 22% – 23 %. Cheers to brand apparel lovers. Now you will be able to trip and stay in decent hotels as they fall in the 18% bracket as compared to the current tax rate of 23%.
28% Tax :
All luxury items and services one wishes for will be dear as they are kept in the 28% tax bracket. Services like Personal Air travel, Yachts, personal grooming items and cosmetics are taxed the highest. Boys should better start earning well as bikes, top end cars, deodorants, shaving creams, etc fall under this category.
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