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How GST will impact your household budget

Goods and services tax (GST) comes into effect from 1 July. ET Wealth analyses the impact on some basic expenses in the household consumption basket.

, ET Bureau|
Updated: Jun 19, 2017, 12.53 PM IST
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Goods and services tax (GST) comes into effect from 1 July. ET Wealth analyses the impact on some basic expenses in the household consumption basket.
Goods and services tax (GST) comes into effect from 1 July. ET Wealth analyses the impact on some basic expenses in the household consumption basket.
Goods and services tax (GST) comes into effect from 1 July. ET Wealth analyses the impact on some basic expenses in the household consumption basket.

AUTOMOBILES
The price difference will be bigger for SUVs (55% to 43%) compared to small cars (30% to 29%).

Base price : Rs 4.75 lakh

Total taxes now* : Rs 1.43 lakh

Under GST : Rs 1.38 lakh

DURABLES : Refrigerators and washing machines
For most white goods, there won't be much difference in price as new rates will be close to earlier ones.

Base price : Rs 20,000

Total taxes now* : Rs 5,300

Under GST : Rs 5,600

LIFE INSURANCE



While premium of term plans and non-life policies are taxed, only charges (mortality and AMC charges, etc) in other life policies attract GST.

Base price : Rs 15,000

Total taxes now* : Rs 2,250

Under GST : Rs 2,700

GOLD ORNAMENTS : Making charges Rs 10,000
The yellow metal will become dearer as there will be 3% GST on gold and 5% on making charges.

Base price : Rs 60,000

Total taxes now* : Rs 1,800

Under GST : Rs 2,000

HOTEL STAY
If you settle for a room that costs less than Rs 1,000, there will be no GST to pay. Then it rises progressively. Anything above Rs 5,000 will attract 28%.

Base price : Rs 7,000

Total taxes now* : Rs 1,400

Under GST : Rs 1,960

REFINED COOKING OIL
Hair oil prices will stay high due to 18% GST. But coconut oil being refined cooking oil, will be taxed at 5%.

Base price : Rs 200

Total taxes now* : Rs 23

Under GST : Rs 10


AIR TRAVEL : Economy
Taxation gap between economy and business class has increased with GST.

Base price : Rs 5,000

Total taxes now* : Rs 300

Under GST : Rs 250

TRAIN TRAVEL : AC coaches
While those travelling by local trains or in sleeper class are not affected, first-class and AC compartment travellers will pay more.

Base price : Rs 3,000

Total taxes now* : Rs 131

Under GST : Rs 150

TELECOM : 2 phones + 1 DTH bills
Since these services will not get much input credit, you have to bear the burden of hiked rates.

Base price : Rs 2,500

Total taxes now* : Rs 375

Under GST : Rs 450

EATING OUT : For a family of 4

A non-AC eatery will only charge 12% GST. However, eating at a restaurant in a 5-star hotel will mean shelling out 28% in GST.

Base price : Rs 2,000

Total taxes now* : Rs 270

Under GST : Rs 360

APPAREL : Readymade
Due to industry pressure, GST on garments priced below Rs 1,000 has been brought down from 12% to 5%.

Base price : Rs 2,000

Total taxes now* : Rs 130

Under GST : Rs 240

ENTERTAINMENT : Cinema for a family of 4
Reduction in GST for tickets up to Rs 100 will benefit single screen cinemas in small towns.

Base price : Rs 1,200

Total taxes now* : Rs 360

Under GST : Rs 336

* This includes excise, sales tax, VAT, entertainment tax, luxury tax, etc; Average tax considered.

These are exempt from GST

* All unprocessed cereals like rice, wheat, etc.

* All unprocessed milk, vegetables, meat, fish, etc

* Train travel by local and sleeper class

* Education

* Healthcare (but not medicines)

* Hotels, lodges with room rent less than Rs 1,000

* Kid’s colouring /drawing books

* Bindis, sindoor, bangles, etc

Also Read

Wrong time to raise GST rates, cautions former GST Council member

States seek pruning of GST exemptions

States demand pending GST compensation

GST structure to be reviewed on revenue concerns

FADA urges GST Council to take definitive decision on GST rate for automobiles

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