One week of GST: Heaven for some, hell for others

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Following the rollout of the Goods and Services Tax (GST) on July 1, there have been mixed reviews - some are happy, some aren't.

Who is happy, and why?

Not many sectors are expressing joy over the new tax regime. For now, they appear to be neutral at best. On the other hand, there are a few which have been more than happy to implement this change.

The businesses associated with logistics are very happy with the implementation of GST with costs coming down by 20 percent. This sector has probably been benefited the most by the new tax regime.

The other advantage the sector has is that all the formalities will be done online from January in the form of an e-way bill. Not only does this help in the smooth transfer of the goods between states but avoids unnecessary paperwork.

Startups

With the GST's composition scheme, the startups are ready to make the most out of this move. Generally, the annual turnover of a startup is below Rs 75 lakh and can hence register for the composition scheme under GST. This scheme lets the taxpayer file only one return, every four months. Startups involved in goods and restaurants can avail this scheme, which will bring respite from tax burdens to these entities.

What about consumers?

Some consumers are happy, some aren't. Some commodities, like school fees, tea, coffee, sanitary napkins and other household items could have been cheaper in GST but are now costlier.

However, the good news is we do not have to pay extra taxes at restaurants. There is also talk for there being a fixed MRP soon. For example, earlier when you bought a bottle of water from the airport or the railway station, you were charged a a higher MRP, but from 2018 there may be only a fixed price.

Who is unhappy, and why?

Several sectors expressed their aversion towards the new tax regime even before it was rolled out.

Textiles

One of the major reasons the textile industry is against GST is because of the standard GST rates. Even though every variety of cloth has different tax rates, it required them to change their entire tax logs and incorporate the change. They were very comfortable with the existing tax system.

Jewellers

Gold is now taxed at 3 percent, as opposed to the earlier tax which was higher. The jewellers were not happy with this decision because this was much lower than the earlier rate. On the flip side, this could also increase their sales.

Scientific apparatus makers

 

A Tribune report said that scientific apparatus makers which deal with its manufacturing and trade are not happy with GST. They now have to pay 18 percent as opposed to the earlier 5.25 percent rate.

Brick manufacturers from fly ash

Zee News reported that brick manufacturers from fly ash (thermal based power plant bricks) have to pay 28 percent tax as opposed to the chimney- based bricks which continue to pay 5 percent.

Category: news update
Source/Author: www.moneycontrol.com




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