India has finally introduced the Goods and Service Tax (GST) after a long period of 16 years. It is believed that this tax is going to simplify the county`s tax structure and GST will help to make India more business-friendly.
Earlier, India has a very complicated tax structure it included dozens of different types of taxes that were separately charged by the state government and central government. Also, Read Advantages and Disadvantages of GST. [How GST Impact on Indian Economy].
GST threshold exemption limit:
The GST threshold exemption limit is different in different countries. In India, there are 2 limits, for northeastern states of India, the limit is around 15,500 USD (10 lakhs INR). And for the other states, the limit is around 31,00 USD (20 lakhs INR).
GST Singapore and Malaysia:
Coming to Malaysia, the threshold exemption limit is much higher as it is close to 1,60,000 USD (75 lakhs INR) and in Singapore, it is even more as the limit reaches around 7,42,500 USD (4.8 crores INR).
GST Slabs (Goods and Service Tax):
In India, GST Slabs (Goods and Service Tax) are different like 0%, 5%, 12%, 18%, and 28% plus cess. GST is nothing new for many countries around the world. Actually, France is the first country to adopt GST, that happened in 1954.
Multiple GST slabs:
Every country has different figures and different GST Slabs just like India, and some countries have multiple GST slabs. For example, in New Zeland GST is 15%, there are 2 slabs in Brazil that are 7% and 12%, in Germany, it is 19%, in Malaysia it is 6% and in Singapore, it is 7%.
How Countries Reacted when introduced GST:
Different countries reacted differently after introducing the Goods and Service Tax around the world. For example, Malaysia introduced GST in 2015 after 26 years of the debate and it did not get the best results in initial.
The people started the anti-GST protest. However, things did settle later and today most of the Malaysians are pretty okay with GST. In Singapore, GST was introduced in 1994. Many social activists opposed it strongly. But eventually inflation settled and today GST is the second largest source of government revenue.
Note: The United States of America is the only major economy that does not have GST. In the US, states have high autonomy in taxation.
GST Implementation (Goods and Service Tax):
The GST implementation (Goods and Service Tax) is such a big event for India, and many citizens were very curious about the new prices of consumer goods. According to the experts, GST simplifies the common procedure for filing, duty payment, and tax refund.
As a country, India will now appear as a common unified national market as it is going to encourage more freedom in movement of goods and services across the country. This may increase competition among vendors which may give some benefit to consumers.
GST Rates and Effects on Products:
After GST Implementing in Indian? All products are available at GST Rates. In India, GST is effecting in different ways. All products prices are changed after GST implementation. Check out the complete details below.
Items that will now cost less:
Cornflakes, Toothpaste, Hair Oil, Ice Cream, Packed paneer, Soaps, Sweets, Packed curd, Economy class air travel, Masala, Cheese, Packed tea, and coffee.
Items that are no changes:
Milk, Juices, Electricity, Fresh Vegetables & Fruits, Bread and Basmati Rice.
Items that will now cost more:
Cold drinks, Shampoo, Furniture, Face Creams, Security services, Television, Maintainance Services, Chewing gum, Legal services, Chocolate, Professional services, Fridge Cleaning services, Watches, Beauty parlour services, Banking Services, Dry cleaning services, Leasing of cars, Edible Oil, Air conditioners, Aluminium oil, Washing machines, Advertising services, Telecom services, Packaged chicken, Butter, Bhujia, Packages pulses, Gold, Restaurant services, and Hotel accommodation.
Opinions on GST:
According to HSBC, GST can add 0.4% points to India’s GDP, according to the government of India it should be more. There is a little bit of uncertainty in the air as it usually happens whenever something as big as this is introduced.
Experts Views on GST:
The experts have their predictions but it is going to be very interesting to see how a common man is affected. It will also be very interesting to see how in the long term, consumers and entrepreneurs are affected too but regardless. I do feel a lot of intense enthusiasm and excitement in the air of India.