Booze, Condoms And Cigarettes: How Will GST Affect Your Weekends?
The unified tax system will be implemented from Saturday and there’s no escaping it
Thank god it’s Friday! But it’s also the last Friday before the Goods and Services Tax (GST) will be implemented by the Narendra Modi government in India after midnight. But what is this GST and how is it supposed to affect your lifestyle? Is partying going to become expensive? And what about a packet of smokes? Let’s find out.
First things first, for those of you who still don’t have a clue about GST, it is an indirect tax that will constitutionally subsume over a dozen taxes levied by the central and state governments across the country.
Goods and services will be taxed in the brackets of 0 percent, 5 percent, 12 percent, 18 percent and 28 percent with a special 0.25 percent on rough precious and semi-precious stones and 3 percent on gold.
Ghar Bar Costs
Now that we’ve got that out of the way, let’s talk about the more important things, like alcohol. Under the GST, alcohol for human use has been kept out, but the tax on raw materials and packaging products will go up drastically.
‘Those new tax rates will push up production costs for liquor firms by between Rs25-40 a case on average, according to several executives,’ according to a Livemint report.
That said the bottomline is that you might have to pay a rupee or two extra for a 180 ml bottle of an economy brand. And once the industry stabilises after passing on the offset to the customer, the prices are expected to get back to normal in 6-8 months.
If your idea of eating out involves fancy outlets, you might want to do exactly that this weekend, because taxes have been reduced to 18 per cent from 28 per cent. This brings them at par with standalone air-conditioned (AC) restaurants.
Even at some air-conditioned restaurants, the bills may come down, as GST will subsume the current service tax and value-added tax (VAT). Non AC-restaurants will attract a 12 per cent GST, which could increase the bills for a budget meal.
Puff, puff pass?
Weekends also have more people indulge in smoking with non-smokers also getting into the act. And post GST implementation, cigarettes would attract a levy of 28 percent GST plus an additional cess of 5%. There are different cess rates on cigs depending on the length.
However, the impact on the tobacco industry is largely perceived to be neutral since the industry was expecting a higher cess. All in all, smoking could get marginally expensive on your pockets unless you’re into bidis as well.
As for weed smokers, rolling paper too is expected to get a touch expensive but you’ll have to contact your dealer to find out what impact GST has on cannabis prices.
Cabs and more
For weekend getaways, hotel rooms are going to get less expensive due to reduced taxes across various price ranges. And if you’re staying locked indoors on a trip, you might even need some condoms, which with a 0 percent GST, should burn a smaller hole in your pocket.
As for the ones who are staying back, there’s good news for you too. Cabs are likely to get cheaper with cab aggregators like Ola and Uber being taxed at five per cent (down from the current six per cent).