GST Changes: What’s Going to Cost More &What’s Going to Cost Less?
On July 1, 2017, India implemented the Goods and Services Tax (GST) system to streamline the tax code and increase transparency.
However, the GST system has undergone several modifications since it was first implemented, including adjustments to rates, exemptions, and compliance standards. As a result, the GST system in India has undergone several significant modifications as of 2023, which will affect how much products and services will cost.
This blog will analyze what will cost more and less in India due to these changes.
GST Slab Rates
The GST Council, which is presided over by the Union Finance Minister and consists of the finance ministers of all states, determines the GST rates in India.
Almost 1300 items and over 500 services are included in India's 4 main GST slabs-
- 5%
- 12%
- 18%
- 28%
The GST Council reviews the products included in each slab rate regularly to adjust for market conditions and business needs changes.
The revised structure ensures that necessities are subject to lower tax categories and that luxury goods and services are subject to higher GST rates.
Items To Cost More & Less As Per the Decisions Taken During the 49th GST Council Meeting
According to the 49th GST Council meeting, specific products will increase in price while others will decrease in price. The things whose costs will go down and whose prices will go up will be listed below.
The items whose costs will go up will be the ones that will become more expensive.
What Is Going to Cost More?
|
Items to Cost More |
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Gutkha |
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Pan Masala |
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Chewing Tobacco |
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Court-Related Services & Tribunals |
|
Application of the Penalty for Late Submission of Annual Returns |
People might anticipate paying more to use the courts now that the GST Council has taxed services rendered by courts and tribunals. The late charge paid for submitting yearly returns late will also be implemented. In addition, the GST rates for chewing tobacco, gutkha, and pan masala would increase.
The GST Council is also anticipated to make a taxing announcement regarding-
- Internet Gaming
- Horse Racing
- Casinos
- Other Currently Tax-Exempt Activities
What Is Going to Cost Less?
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Items to Cost Less |
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Entrance Exam Fees of Educational Institutes (Conducted by NTA) |
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Pencil Sharpeners |
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Liquid Jaggery |
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Coal Rejects |
The GST rates on several commodities have lowered, including pencil sharpeners, coal rejects, data recorders, and liquid jaggery. GST will also not apply to any entrance exam fees charged by the National Testing Agency.
Further, the likelihood is that the GST rate on liquid jaggery would be lowered from 18% to 5% or perhaps nothing. In the case of a loose sale, there will be no GST.
However, a 5% fee will be applied if packaged and labelled. Farmers who grow jaggery, particularly those in Uttar Pradesh and Bihar, would benefit from this action.
Additionally, electronic gadgets are called data loggers to keep track of environmental data over time or in connection to their location. Data loggers are now more reasonably priced for businesses and academics that need to utilize them for their work because the GST has decreased from 18% to zero.
Lastly, government announcements about millet subsidies and tax exemptions are anticipated.
Other Changes Relating to Goods and Services-
- Due to sincere uncertainties over its categorization and appropriate GST rate, it has been determined to regularize payment of GST on ‘Rab’ during the prior period on an ‘as is basis.’
- It was decided to appropriately amend notification No. 104/94-Customs, dated 16.03.1994, so that if a device, such as a tag-tracking device or data logger, is already attached to a container, no separate IGST shall be imposed on such a connected device, and the ‘nil’ IGST treatment available for the containers under notification No. 104/94-Customs shall also be open to the such attached device subject to the existing conditions.
- It has been decided to modify the entry at S1. No. 41A of notification No. 1/2017 Compensation Cess (Rate) so that deduction benefit covers both coals rejects supplied to and by a coal washery that results from coal on which compensation cess has been paid, and no person has claimed an input tax credit therefore.
- The decision has been made to extend the exemption granted to educational institutions and Central and State educational boards for the administration of entrance exams to any authority, board, or organization established by the Central Government or State Government, including the National Testing Agency.
- It has been decided to extend the exemption from paying GST under the reverse charge mechanism (RCM) that is available to the Central Government, State Governments, Parliament, and State Legislatures to the Courts and Tribunals as well as in respect of taxable services supplied by them, such as renting space to telecommunication companies for the installation of towers, renting out chambers to attorneys, etc.
Conclusion
In conclusion, GST changes and adjustments may impact the costs of a range of products and services.
While certain goods and services could become more affordable, others might increase in price. However, the precise effect of GST adjustments on pricing may differ based on several variables, including supply and demand, competition, and market circumstances.
It is essential to remember that the GST rates and exclusions might vary depending on the GST Council's decisions. Hence, it is vital to keep up with the most recent GST adjustments to comprehend how they affect the costs of products and services.