By now, you've been subjected to a lot of information on GST. Much has been written about how it will take away the impact of taxes and provide ease of doing business. But, what does it really mean for you?
Illustration/ Uday Mohite
Civic services
The octroi — which used to be the BMC's biggest source of income, at Rs 7,000 crore annually — has been abolished, but charges for civic services like water and sewerage, birth/death certificate and shop licence as well as property taxes have been kept out of the GST purview, says Dr BG Pawar, deputy municipal commissioner who is looking after GST's implementation in the BMC. Removal of octroi means dip in prices of most consumer goods and faster delivery.
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Healthcare
Essential medicines will cost less (capped at 5% tax, from 5-8%), but there is a hike in prices of about 2,000 non-essential drugs (from 6% to 12% tax) and nutritional supplements (18%). The Retail and Dispensing Chemists Association (RDCA) is planning on moving the HC over it. "Diabetic patients need nutritional products," says Damji Palan, president of RDCA. But, distributors are satisfied with the end in ambiguity over several layers of taxation.
Electronics/white goods
Mobile phones have become costlier by 4-5% (now 12% tax). The owner of an Andheri mobile phone outlet, however, says his sales have not been affected so far. Laptops and desktops are taxed at 18% (previously 14-15%). Televisions will cost 4-5% more after being put under the 28% slab. Mobile phone bills will also see a surge owing to an 18% tax on telecom services (previously 15%). So, a Rs 100 prepaid top-up recharge will get a talktime of only Rs 80 as compared with the previous Rs 83.
Tour packages
There is a marginal rise in domestic and international tour packages (from 4.5% to 5%). Debasis Nandy, CFO and president, commercial, finance and accounts, Thomas Cook (India) Ltd, says, "There's unlikely to be any impact on the holiday demand. The increase on international airfares is also marginal." Vishal Suri, managing director, SOTC Travels, points out that packages involving luxury hotels (28% tax) and business class airfares (12%) could offset the benefits.
Restaurants
Ordering in has become expensive by about 5%. Earlier, most restaurants didn't add a tax to the delivery bill amount, or just added the VAT, leaving the service tax out. Now, a bill of R880 for three dishes at an Andheri west restaurant costs Rs 1,033 for home delivery. The tax on food and drinks in AC establishments has dropped from 20.5% to 18%, to 12% in non-AC ones. Restaurants with a licence to serve liquor are levying a tax of 18%, and those without air-conditioning or central heating, 12%. Five-stars will pinch your pocket substantially (up from 18% to 25%).
Rail travel
The tax on AC and first class train tickets has gone up marginally (from 4.5% to 5%). But, items sold by food stalls at railway stations will attract 12% GST. This increases to 18% in AC restaurants at stations and in train coaches. There is a 0.5% discount on purchase of season passes till September.
Nature trails/treks
Costs of wildlife and nature tour packages are more or less the same. Kaustub Upadhe from Mumbai-based travel company, Jungle Lore, says GST will spur a "fair competition". "Malpractices by unregistered companies will end since they will all have to register now." Wildlife tour and travel operator Amit Panariya feels the new tax regime is a "win-win situation" for both tourists and businesspersons.
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