GST launched: Is your monthly household budget ready?

GST effect! Watching an IPL match in stadium to become costlier after July 1

GST effect! Watching an IPL match in stadium to become costlier after July 1

At the stroke of midnight when the Narendra Modi government launched goods and services tax (GST), a new tax subsumed multiple indirect taxes, throwing into doubt its impact on various industries.

Shringi added that prices under GST will not surge, but reduce because of the "anti-profiteering law", which requires that if there is an excess of profit at the manufacturer or the seller's base, it is mandatory to be passed on to the consumer.

PM Modi while detailing how GST would help fight corruption and black money, also had reassuring words for small traders jittery about being drawn into the tax net and complicated processes. "From Ganganagar to Itanagar and Leh to Lakshadweep, it is one nation, one tax", he said.

The GST Council had fitted almost 2,500 goods and services in the five-tier tax structure of 0, 5, 12, 18 and 28 percent. However, numerous services such as mobile phone services, healthcare services as well as transportation charges are expected to attract a tax rate of 18%, which is 3% more than its current 15% tax rate. Pranjul Bhandari, chief India economist at HSBC, explained that in HSBC's previous estimate, the growth fillip was meant to come from "having the same tax rate for each product across all states and having the same tax rate across all goods and services".

In Kolkata, many shopkeepers said they had not switched over to GST at all. "Prices may go up for a few items but prices of maximum items will either go down or remain unchanged", said Jaitley, adding that every businessman will have to file only one return by 10th of every month after which the computer software will automatically generate the rest of the reports.

GST was first proposed in 2003, but the idea could not take off in wake of stiff opposition from opposition parties.

However, the People's Democratic Party (PDP) - Bharatiya Janata Party (BJP) Government has claimed that the "special status won't be diluted in any case". But now, a trader with a turnover of Rs 20-75 lakh will have to pay 2.5 per cent tax.

GST has caused initial hiccups everywhere before stabilizing in one year.

Another bill is surfacing online which shows a bill without GST, as fresh fish is exempted from the tax.

Malaysia implemented GST after debating it for 26 years.

The important tax reform which the country has been waiting for a decade-and-a-half is beginning Saturday, he said after attending the midnight function in Parliament organized for a rollout of the GST.

"There will be inflation. Micro, small and medium scale traders will suffer huge losses due to this", Chidambaram told media here.

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