What is GST ? In detail advantage and disadvantage of GST.
What is GST?
GST is an indirect tax i.e. indirect tax. A type of tax is levied on goods and products under GST. According to the Indian constitution, the state and central governments now impose taxes on goods and services according to their own interests.
If there are any company or factory. If one sells his product from one state to another, then he has to pay a lot of taxes, which increases the price of the product. With the introduction of GST, the cost of those products will be reduced.
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What is SGST, CGST and IGST?
The sale of goods within the state will look like Central Goods and Service Tax and State Goods and Service Tax. For example, if a person of Uttar Pradesh sells the goods to a person of UP and the GST rate on that item and the item is 18% then 9% CGST and 9% will be SGST.
And if the goods are sold to a person outside the state then IGST will be at the rate of 18 percent. CGST will take place instead of excise, duty, service tax, custom duty and other central indirect taxes. SGST will replace Entertainment Tax, entry tax, value added tax.
Advantage and disadvantage of GST
Insurance charge will be increases.
At present, service tax rate is 15% on banking, insurance and real estate, mutual fund investments. After GST is implemented, it will increase by 3 percent and the rate will be 18 percent. There are three types of insurance mainly - term insurance plans, ULIP and provident fund (including money back). These three will have to give 18 percent GST instead of 15 percent.
Bank transactions
After the GST is implemented, the service tax on credit card bills and banking transactions will also be expensive. At present, service tax is levied at 15 per cent, which will increase to 18 per cent under GST.
Mobile phone
Mobile phones will be cheap in some states and expensive for some states Under GST, the tax rate for mobile is fixed at 12 percent. For states where the VAT was 14 percent, mobile phones would be cheap. But in states like Karnataka, Tamil Nadu and Kerala, VAT is 5 per cent, so people there will have to pay 12 per cent tax on mobile and mobile will become expensive there.
Economy class air journey
After the GST is implemented, the travel in economy class will be cheaper in the future, but people traveling in the business class will have to spend a little more money. 5 percent service tax was levied on economy class in GST which was 6 percent earlier. At the same time, there was a 9 percent tax on the business class, which has been increased to 12 percent.
Five star hotel charge.
Staying in Five Star Hotel will also be expensive after GST is implemented. Under the new rule, a hotel tax of between Rs 2,500 and Rs 7500 will be 18 percent tax. The room at 7,500 and above will be taxed 28 percent. The hospitality industry currently employs tax between 18 to 25 percent, including luxury tax and service tax. Those hotels and Loos are excluded from GST, which charge Rs.1000 or less. Similarly, a charge of Rs. 1000 to 2500 will be 12 percent tax.
Restaurant charge.
In some cases the restaurant may have cheaper food. Under GST, the service tax and VAT charged in the restaurant have been added. In the air conditioned restaurant, 18 percent tax will be charged on food bill while non-AC restaurant will take 12 percent GST. However, it will charge 18% for both AC and non-AC seating by the restaurants. Currently, there are two types of tax on food bill. In the AC restaurant, the VAT on Food Bill (12.5 percent to 14.5 percent, according to various states), service tax (5.6 percent), 0.2 percent agricultural welfare cess and 0.2 percent clean India cess.