How GST affects Electronic and Automation products
Goods and services Tax bill (GST) has finally passed out from the Lok Sabha, and it will be implemented from July 2017. The main goal of GST bill is to make a single tax for a single nation, with the new GST bill there will be a greater impact on the industries and consumers.
GST council analyzed the new tax rates of 1200 goods and 500 services, which results that daily use items like toothpaste, soap, shampoos will become less while the vegetables, bread, fresh fruits and milk will be free from any taxes.
How GST affects Electronic and Automation products?
Most of the electronic industry experts claiming that the all new GST rates will have a greater impact on the electronic industry and the tax rates may increase up to 4-5%. Earlier the service tax and VAT rates on the electronic industry was 23-28% with cumulative tax, but this time with the new GST it may increase more than the 28% which will severely impact on the rising electronic industry in India.
However, the prices of smartphones will become cheaper as per the new tax rates that are 12% which is less than the previous tax rate 13.5%. Along with the smartphones, television rates will also become cheaper with the new GST rates because the tax rates are dropped from 24.5% to 18-20%.
What will be expensive?
- Dining out with your family or friends will be expensive with the new GST tax rates because the regular average 18.5% service tax and VAT have increased to 20% which will cost you more.
- Phone bills will become expensive because the service tax which you’ve been paying from all these years has been increased from 15% to 18% which further effects on higher call rates and internet packs.
- Jewelry prices also will be increased, at this point of time consumers paying 2% tax on the Jewellery items but after implementation of GST at least 6% which will impact on buyers.
- Consumers who make Online shopping from E-commerce stores will also charge a little more, and the new GST tax rates also apply to the online products.
- Banking and insurance taxes are increased from 17-18% from 14.5% which results in higher bank service charges and insurance rates.
- Air tickets rates will become high with the new tax rates because the service tax has increased from 9% to 17%.
What will become cheaper??
- If you’ve been thinking about buying a car just wait for one more month because the excise duty and VAT rates are dropped from 18% through which you can save up to Rs 35,000 on 5 Lakh cars.
- Movie ticket prices will be lower because the entertainment taxes are likely to reduce by 2 to 4%.
- Processed foods prices become cheaper, processed food manufacturing companies now paying up to 24-25% with the all new tax rates will be reduced to 17-19%.
- Taxes for Construing industries and logistics companies will also become cheaper with the all new GST rates, present there is 25% tax for cement after GST regularization it will be summed up to 18-20%.