Mumbai: It has been nearly 10 days since the rollout of the Goods and Services Tax (GST) and rumours and speculations about this new tax regime have gripped the minds of traders, businessmen and consumers just the same.
Here is a reality check to bust a few of these rumours doing the rounds:
1. GST will wreck small traders without internet connection.
Reality: Invoices can be generated manually as well as online. Moreover, internet will only be required for filing monthly returns.
2. GST is a single umbrella tax and we will not be required to pay any extra tax anywhere.
Reality: Yes, GST is a single umbrella tax that subsumes a host of taxes. However, some levies like that on petrol, liquor, electricity do not fall under the ambit of this new tax. They are subjected to tax rates decided by respective states. Hence, while it is true that dinner at a restaurant that serves alcohol is likely to cost you 18 per cent GST everywhere in India, your alcohol bill will be separate in different states.
3. GST will increase/decrease prices of items we consumer daily.
Reality: There is a major confusion among consumers whether GST will increase the grocery bill or decrease it. Ideally, GST should be decreasing your bill because the cascading effect of tax-on-tax is gone. However, prices of branded items like biscuits, cereals, jam, cosmetics, etc will go up as they now attract a higher tax rate.
However, your bill from buying vegetables form your local vendor should bear no impact of GST as these are exempt from the tax. Many confused customers are being fooled by vendors who are selling vegetables at higher prices and citing GST as the reason.
4. GST will be charged twice if you make payment using credit cards.
Reality: There is no GST on making payments via credit cards. Right from pre-GST era, there has been service tax levied on processing fees, convenience charges incurred by companies. That tax under GST has increased from 15-18 per cent.
5. Common man will get full benefit of GST from governments
Reality: While it is true that all state governments are doing their best to ensure GST benefits are passed on to consumers, some of them are increasing other taxes outside the ambit of GST to find a balance. For example, the Maharashtra government has increased the tax on registration of vehicles by 2 per cent after octroi taxes were abolished and auto firms started passing on GST benefits to consumers....