How Coffee, travel, hotels, other commodities will act post GST Implementation
New Delhi: After GST arrives, your everyday needs will be a little expensive and a little cheaper. If you feel that inflation will go up too much then it will not be so. What will be the difference between your everyday life for the things you buy post the implementation of GST?
Cold drink: Current Rs 50 bottle will cost up to Rs. 54, that is another addition of Rs 4. If you think it is too much than it is ok, you can’t do any thing.
The cold drink industry of 22,000 crore will make the biggest difference in this case. All the taxes that sum up now to 32% will move over to 40%. Meaning cold drinks will be more expensive. This means that in earlier Cold drink - VAT, Octroi, Excise, Cess etc. would have been of Rs 50, it would now be 54 rupees after GST.
Coffee: 50 gm packet which coasted earlier Rs 100, now coffee packet will be between Rs 97-95
If you are going to drink out coffee then it depends entirely on your restaurant, how much you have to pay, but if you buy a coffee or tea pack, then there will be a slight change. It will be cheaper.
For example, if you bought two packets of Coffee and their price is 50 rupees per pack. Currently there is no excise duty in coffee, besides 5% VAT and 3% to 6% in Gujarat, Maharashtra and Punjab. Places where there is no octroi, there are little or no tax on production time. So in total, around 7% -8% of the duties on coffee, then you used to pay tax of 2.5 to 5 rupees on one pack.
Now the packet of coffee and instant coffee will be available in less than Rs 2.5-5, which means that your budget from the existing Rs 100 will go down to Rs 97-95.
Biscuit: Rs 10 Pack, might become 1 Rs Cheap or expensive
Biscuit will not make much difference, currently it 15 to 21% tax and post GST implementation it would be 18% fixed. This tax is applicable to branded biscuit. The biscuits purchased from the bakery etc. will be cheap. However, some types of branded biscuits in which 15% of tax was taxed could be expensive. However, the biscuits above Rs 100 per kg will be cheaper.
For example, If your biscuit packet is 10 rupees then a tax of around 2-4 rupees will be applicable on it. It may be 9 rupees in the coming time. If it was 15% tax on it, it would be costlier, i.e., 11 rupees.
Travel Flight: Delhi-Mumbai flight will cost Rs. 2960 for Rs. 3000.
There will be very little difference in the economy class in the air travel. The current tax rate is 5.80-6% and after GST is implemented, it will be 5%. Apart from this, the journey for business class passengers will be expensive. Now the tax rate is 9% and it will be 12%.
For example, If the base charge of a flight ticket is Rs 1300, then first it is 78 rupees service tax and then 7 rupees agricultural welfare cess. After this, Rs 150 for passenger service fees, in addition, seat fees, airline fuel charge user development fees, all this add up to Rs 3000, post GST implementation the economy class would add up to Rs 2960.
Train Tickets: AC ticket from Bhopal to Delhi will be expensive by 10 rupees ...
As far as the train is concerned, the charges for the AC prices will increase marginally. The current rate is 4.5% and after GST it will be 5%. The service tax is currently applicable only in AC and first class coaches, the sleeper class and the general will not make any difference post GST implementation.
Accordingly, if a ticket from Bhopal to Delhi was to be of Rs. 2000 then now post GST, it will be Rs. 2010.
Cab Services like OLA: 1 rupee difference on every 10 kilometers
Your cab ride will now be somewhat cheaper after GST. The government has reduced its rate from existing 6% to 5%.
So if you book a mini-cab whose base fare is 50 rupees and if you travel for10 kilometers, then by 8 rupees rate, you would have to pay 80 rupees. Earlier for Rs 140 you had to pay Rs 8.4 tax. Now the same ride will cost 147 rupees instead of 149 rupees. Now, if your bill comes more than that i.e., around 300 rupees, then the difference will be 3 rupees i.e. where earlier it was Rs 318 and now it will be 315 rupees.
Hotel Room: For the current Room price 2800, you might have to pay Rs 2815
On July 1, there will be no tax on those hotels where rent is less than Rs. 1000. Apart from that, hotels that rent 7000 and above (per day) will have to pay 28% tax on them. 28% tax on such restaurants as well. The hotels taking between Rs 1,000 and Rs 2500 per day will take 12% tax and hotels taking between Rs 2500 and Rs 7500 per day will take 18% tax. Hotels above 7500 will attribute 28% GST.
At present, there is luxury tax, VAT and service tax (service charge in some places). Luxury tax is different in different states. Taxation takes place only 60% of the bill and not the whole rent.
GST will be applicable to the real room rent. This means that if my hotel bill was 2500 earlier and I had booked a hotel in Maharashtra, then I would have to pay a 300 rupees tax on that hotel charge, which was earlier Rs 285 to Rs 315 (according to different hotels, 19-25% Tax was supposed to be on 60 percent of the bill.)
It is worth noting that in the GST meeting on June 11, the hotel tax has been changed from the government side.
Mobile recharge: For Rs 100 recharge, from current Rs 85, you will get 82 Rs Balance.
After GST, recharge and phone bill will be expensive, be prepared for it. The tax which was now 15% in the bill will go upto 18%.
How expensive would it be?
If you now pay a bill of 1000 rupees, then 14% of service tax, clean India Cess 0.50% and 0.50% of agriculture welfare cess. So it seems 15% of the total. That is, a bill of Rs.150 is taxed at Rs. 150. Now after GST, it will cost 180 rupees, i.e. more than 30 rupees.
Note: This article is just a assumption based on the taxes which are going to be charged, this may change post implementation, based on the price of the commodities.