GST's impact on consumers, traders, government

In many cases it may weigh heavily on your pockets while in others it may soothe the traders' frayed nerves with input tax credit.

New Delhi, June 29: The Goods and Services Tax will irreversibly impact consumers, traders, businesses as well as the revenue collection machines of the states and the centre when the biggest tax reform set to receive a red carpet welcome in Parliament's Central Hall when the clock strikes midnight on June 30. Though the real impact of the government's big-bang reform can be assessed only after a full year of its implementation, let us gauge its effect on the various aspects of trade, consumer prices and government revenue.

GST likely to hit medicine supply

The pharmaceutical industry is reeling under uncertainty over what will happen to the supply of medicines if the GST gets implemented from July 1. Here in this photo, people are seen buying medicines at a medical store as prices may soar after GST, in Kolkata

Textile traders stage a demonstration against GST

Over 2,000 textile outlets in Sowcarpet downed their shutters for the second consecutive day on Wednesday against the Goods and Services Tax (GST), which will come into force on July 1. Cloth merchants observed state-wide bandh to protest against imposition of 5 per cent sales tax on textiles under the upcoming GST regime.

So what gets cheaper under GST?

Postage or revenue stamps will also become cheaper as GST on these has been reduced to five per cent. Tax rate on cutlery, ketchup, sauces and pickle under GST will likely become cheaper as they will be taxed at 12 per cent. Salt, children's picture, drawing or colouring books and cereal grains have been exempted under GST. Playing cards, chess board, carrom board and other board games have been reduced to 12 per cent GST rate. Rough precious and semi-precious stones have been kept at a special rate of 0.25 per cent under GST.

How the traders will be affected?

Traders below Rs 20 lakh annual turnover are exempt under GST as compared to the current threshold of Rs 10 lakh in indirect taxes. Traders, manufacturers and restaurants with up to Rs 75 lakh turnover can go for the Composition Scheme and pay 1, 2 and 5 per cent tax respectively. Such businesses though will not get input tax credit but will have to file only one quarterly return. Rest of the traders will have to file three returns every month, out of which two will be auto-populated.

OneIndia News (with inputs from IANS)