How GST would affect your festive season shopping

How GST would affect your festive season shopping

Festivals are near and like always you all must be planning for it with empty shopping carts to 'bag' the discounts. But in the era of Goods and Services Tax (GST), festivities may not appear as lucrative as they did before. Hefty discounts and big-banner sales may be low-scale in the new tax regime. With the introduction of GST, manufacturers and retailers grapple to work out the best deals to ensure their customer base and profit-margins match the previous years. But before you curse the GST for killing your festive shopping goals, be ready to witness a more realistic discount on your purchases this festive season.
Let us take a look at how GST is likely to impact your festive season shopping.
Understanding GST
GST has been introduced to replace the multiple direct and indirect tax structure with a single tax structure, applicable on supply of all goods and services with a few exceptions (like alcohol). It not only allows for a single tax structure across India replacing the different taxes of state excise, central excise, VAT along with service tax, but also offers a full tax credit from procurement of inputs and capital goods.
The GST implementation has introduced four tax slabs - 5%, 12%, 18% and 28%, besides exempt and additional cesses category.
Festive Shopping Hits And Misses
Sweets and traditional 'Mithai': Sweets and chocolates could cost you more this festive season with 5% GST on sugar.
Apparels: With a 5% GST on apparels below Rs. 1,000 and 12% above Rs. 1,000, you would only see straight product discounts this festive season. You may not see 'buy one get one free' offers or freebies as it won't allow retailers to claim input tax credit facility on zero value products.
Electronic Gadgets And Home Appliances: If you are planning to buy a high-end phone or a home appliance, it may not come with a hefty discount this festive season. However, after the implementation of GST, electronic items saw a 2-3% increase in tax in comparison to previous tax system. This may see softening with the benefit of input tax credit reaching to the downstream.
Cars and bikes: GST brought down car prices in the luxury segment and SUVs. The government has recently proposed to introduce cess at 25% rate, which may increase the prices of high-end cars.
Gold and jewellery: Buying gold during festive season is a popular practice. You need to pay 3% tax on gold jewellery and a 3% tax on the making charge after GST. Gold coin and biscuits will invite GST at 3% and 18 % rate respectively. 
The onset of GST has meant that this festive season be ready for genuine discounts rather than over the top freebies.
Source :  BusinessToday in

Comments

Popular posts from this blog

GST Council cuts rates on 177 items; chocolates, shampoo to attract 18% tax

Consequences of incorrect invoice details uploaded while filing GSTR 1

CPI Numbers on Base 2012=100 for Rural, Urban and Combined for the Month of August 2017