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After GST rollout, know what’s getting costlier and cheaper!

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New Delhi, July 1, 2017: The Goods and Services Tax (GST), India’s biggest tax reform since Independence has finally rolled out past midnight Friday.

The GST Council has bracketed all the goods and services in the country in five categories – 0 per cent, 5 per cent, 12 per cent, 18 per cent and 28 per cent.

However, some of these products had higher effective tax rates before the GST and the new tax regime will reduce the burden on consumers, some of the items will now be taxed at higher rate. While 7 percent of the items come under the exempted list, 14 per cent fall in the 5 percent tax slab, 17 per cent in the 12 per cent slab, 43 per cent under 18 per cent tax rate and only 19 percent of the items will fall under the highest 28 per cent tax slab in the new regime.

Now, after the ‘One Nation, One Tax’ under the new Goods and Services Tax (GST) regime finally becomes a reality from July 1, the consumers have only one thing in their mind that what will get cheaper and what will cost more.

Here is all you need to know what’s getting cheaper and what’s getting costlier:

Food related products:

Food related products-WEFORNEWS-min

Cheaper under GST: The Union Government have exempted most of the food items from tax under the GST, while others fall in lower tax category of 5% or 12%. Under the new GST, rules unpacked foodgrains, unbranded atta, besan, maida, fresh vegetables, salt and fruits will get cheaper as these items have been exempted from tax under the new tax reforms. Apart from the above-mentioned items, processed food items which fall under 5% tax will also get cheaper.

Costlier under GST: Branded coffee, tea and spices will be taxed at 5 percent. Currently, these items are taxed at the rate of 3-4 per cent.

Footwear/Apparel:

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Cheaper under GST: Footwear and clothing have been put under different tax slabs ranging from 0 to 18 per cent. But most of them will get cheaper under the new tax scheme.

Costlier under GST: Purchase of garments and apparels up to Rs 1,000, come under 5 per cent GST tax slab, beyond which they will be taxed at 12 per cent. The same rates will be applied for other readymade apparel such as salwar kurtas, dresses, skirts, tops and jeans, reports Businessline.

Personal care products:

Personal care products-WEFORNEWS-min

Cheaper under GST: Products like soaps, hair oil and toothpaste will become cheaper at 18 per cent tax, as previously they were taxed at 24-28 percent.

Costlier under GST: Products like deodorants and shampoos will become more expensive after implementation of GST.

Household items:

Household items-WEFORNEWS-minCheaper under GST: Household items such as pressure cookers and pans will get cheaper as they will be taxed at 12 per cent GST rate, much less than the current 19.5 percent rate.

Costlier under GST: All home appliances like television, refrigerator, air-conditioner and washing machine will attract a 28 per cent tax rate, higher than the existing rate of 23-28 per cent (depending on the state where taxpayers live).

Hotels:

Cheaper under GST: The effect of GST on hotels will vary from segment to segment. However, non-luxury hotels and hotels with tariffs of less than Rs 7,500 are expected to get cheaper under the new tax reforms.

Costlier under GST: Hotels that have air condition and serve liquor will come under 18 per cent GST. Hotels with room tariffs between Rs 2,500 and Rs 7,500 will also fall under 18 per cent GST. Hotels with room tariffs above Rs 7,500 and 5-star hotels will come under 28 per cent GST, making the stay costlier.

Restaurants:

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Cheaper under GST: Having dinner or lunch at small restaurants will also cost less after the implementation of GST. Small restaurants have been placed under the 5 per cent tax bracket under the new GST rates.

Costlier under GST: Restaurants inside five-star hotels and fine-dine restaurants will cost more.

Movie tickets:

Movie ticket-wefornews-min

Cheaper under GST: Tickets under Rs 100 will get cheaper in most states with a new rate of 18 per cent. Most states charged 25-30 per cent tax on movie tickets.

Costlier under GST: Cinema ticket above Rs 100 will cost more with 28 per cent GST. However, the impact will be different from state to state depending upon the existing rates of entertainment tax.

Automobiles:

Automobiles-wefornews-min

Cheaper under GST: Bikes or scooters with engine capacity below 350 cc, some categories of commercial vehicles including three-wheelers, SUVs will get cheaper under the GST. The tax rate varies from segment to segment.

Costlier under GST: Two-wheelers with an engine capacity of more than 350 cc and three-wheelers will become costlier with the implementation of the GST.

Travel tickets:

cheap-airfares-udan-scheme

Cheaper under GST: Airfares for economy class travel are expected to go down after GST implementation. These tickets have been placed in the 5 percent tax bracket under the GST.

Costlier under GST: Airfares for business class and first class train tickets will cost more. This has been placed in the 12 percent tax bracket.

Other Items

Cheaper under GST

  • Postage or revenue stamps will also become cheaper as GST on these has been reduced to five per cent.
  • With 81 per cent of items falling under below 18 percent tax rate, certain goods that will become cheaper are salad dressings, mayonnaise, weighing machinery, static converters (UPS), electric transformers, and winding wires.
  • The tax rate on cutlery, ketchup, sauces and pickle under GST will likely become cheaper as they will be taxed at 12 percent.

Costlier under GST

  • Services: Courier services, mobile phone tariffs, insurance premiums, banking charges, broadband services will get costlier as they will come under the 18 percent tax bracket. Earlier there was a service tax of 15 percent on such services.
  • Sin products: Taxes on aerated drinks, tobacco and luxury goods will now come under the 28 percent tax bracket under GST, so it will get costlier.
  • Mobile bills, tuition fees and salon visits will also get costlier by three per cent, as GST at the rate of 18 per cent will be applicable on all services from July 1 as compared to the current service tax rate of 15 percent.
  • In GST regime, buying a flat or shop will attract GST of 12 per cent as compared to current six per cent approximately.
  • Building Construction: Cement, steel and other raw material used in building construction will become costlier under the GST.

Wefornews Bureau

India

Loya issue ‘serious’, will examine all matters, says SC

Matter is serious. Let us look at full records. Let it never be on our conscience that we did not look at what we should have.

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cbi judge death mystery

New Delhi, Jan 22 (IANS) The Supreme Court on Monday said the controversy surrounding the death of Special CBI court judge B.H. Loya is “serious” and it will look into the circumstances leading to his death in November 2014.

Judge Loya was holding the trial into the staged shootout deaths of Sohrabuddin Sheikh and two others.

“Matter is serious. Let us look at full records. Let it never be on our conscience that we did not look at what we should have,” the bench said as it directed all the parties to file whatever material they have relating to Loya’s death and the circumstances leading to it and set the next hearing for February 2.

Senior counsel Dushyant Dave, appearing for the Bombay Lawyers Association, and Indira Jaising, appearing for an intervener, said that the records being produced by the Maharashtra government were not complete as they pointed to some documents they had accessed through RTI.

“There is no question of restricting the records. Prepare a compilation of the record,” Justice D.Y. Chandrachud said allowing both the sides to file whatever documents they had in their possession.

The bench of Chief Justice Dipak Misra, Justice A.M.Khanwilkar and Justice Chandrachud also transferred to itself two petitions pending before the Bombay High Court and its Nagpur bench relating to the matter.

At the outset of the hearing, Dave objected to senior counsel Harish Salve, appearing for Maharashtra, saying that it was “not fair” for him to appear for the state government after appearing for BJP President Amit Shah, and that he has “done enough damage to the institution” and “there is a conflict of interest”.

He sought the appointment of amicus curiae to assist the court, but the court was not moved.

“We are on the circumstances leading to the death of Judge Loya. Let us not comment who is appearing for whom,” said Justice Chandrachud.

In a face-off between Dave and Salve, Dave said: “Entire institution is trying to protect one man – Amit Shah and Amit Shah alone” whom he described as “politician of great excellence”.

At this, Salve objected, saying: “What is this Amit Shah, Amit Shah. You are blaming somebody in the court behind his back. You can’t caste aspersion on somebody. You can’t jump three steps and pass comments just because he happens to be a prominent politician.”

As in the course of the arguments, Dave raised the pitch, the court intervened, saying that all the counsel appearing in the matter should assist it to “examine the documents objectively” and assuring that it would order the probe if needed.

As Dave, at one point, said that “as of today, it is a natural death”, Justice Chandrachud said: “If as on today, it is a natural death, you can’t cast aspersions. Let us look at the material objectively, so that we are not blamed that we did not look at the material dispassionately.”

In another face off between the rival lawyers, Jaising objected to Salve saying that the confidentiality of whatever material they will share with the counsel for petitioners and interveners be maintained and not shared with media, noting that it is like seeking a gag order against media.

As Justice Chandrachud said that “He is not saying gag the press. He is just saying …”, Jaising countered: “It means the same.”

As she said that court should not pass any order on Salver’s plea, the CJI asked if the court had said anything.

“Did we utter a word? Did we say gag? You can’t say order of the court. We are just discussing the matter,” he told Jaising asking her to withdraw her statement and apologise. She complied.

However, Dave said that if two judges in the Loya matter can address a press conference, why can’t the nation discuss it. He said that if the matters of Shashi Tharoor and P. Chidambram can be discussed in the media, then why not the Loya matter.

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Analysis

India’s growing rich-poor divide: Richest 1% gross 73% wealth in 2017

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India’s richest, just 1 per cent of its 1.3 billion people, grossed 73 per cent of the wealth generated in 2017 while the wealth of the poorest half of Indians — some 67 crore — rose by only one per cent, according to a report by Oxfam.

The report, launched on Monday ahead of the gathering of some of the world’s richest at the World Economic Forum here, said the wealth of India’s elite went up last year by Rs 20,913 billion — an amount equivalent to the government’s total budget in 2017-18.

The Davos event is being attended by Prime Minister Narendra Modi. Oxfam India has urged him to ensure that the “economy works for everyone and not just the fortunate few” in line with the government’s ‘sabka saath, sabka vikas’ slogan.

“It is alarming that the benefits of economic growth in India continue to concentrate in fewer hands. The billionaire boom is not a sign of a thriving economy but a symptom of a failing economic system,” said Nisha Agrawal, CEO of Oxfam India.

“Those working hard, growing food for the country, building infrastructure, working in factories are struggling to fund their child’s education, buy medicines for family members and manage two meals a day. The growing divide undermines democracy and promotes corruption and cronyism.”

The report, ‘Reward Work, Not Wealth’, has also found that India’s top 10 per cent of population have 73 per cent of the total wealth in the country.

“Indian billionaires’ wealth increased by Rs 4,891 billion – from Rs 15,778 billion to over Rs 20,676 billion,” it said, adding the amount of Rs 4,891 billion was sufficient to finance 85 per cent of the budget on health and education in all Indian states.

It said India added 17 new billionaires last year, raising the number to 101. But 37 per cent of the these billionaires inherited the wealth from their families.

It said 51 billionaires out of the total 101 were aged 65 or above.

“If we assume that in the next 20 years, at least Rs 10,544 billion will be passed on to the inheritors and on that if 30 per cent inheritance tax is imposed, the government can earn at least Rs 3,176 billion.”

This will be sufficient to finance six crucial services — medical and public health, family welfare, water and sanitation, housing, urban development and labour and labour welfare in the country.

The report said at least one in every two workers in the garment sector in India were paid below the minimum wage. By those standards, the report said, “it will take 941 years for a minimum wage worker in rural India to earn what the top paid executive at a leading Indian garment firm earns in a year”.

Oxfam called upon the government to promote “inclusive growth by ensuring that the income of the bottom 40 per cent of the population grows faster than of the top 10 per cent” to close the income gap.

“This can be done by encouraging labour-intensive sectors that will create more jobs; investing in agriculture; and effectively implementing the social protection schemes that exist.”

It said the government must also seal the leaking wealth bucket by taking stringent measures against tax evasion and avoidance.

The income gap can also be reduced by “taxing the super-rich by re-introducing inheritance tax, increasing wealth tax, reducing and eventually do away with corporate tax breaks and creating a more equal opportunity country by increasing public expenditure on health and education”, it said.

The charity said the government must also bring data transparency, produce and make available high quality data on income and wealth and regularly monitor the measures it takes to tackle the issue of rising inequality.

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Business

Gross NPA may rise to Rs 9.5 lakh crore by March: Study

“Fiscal 2018 marks beginning of third phase of ARCs which promises to change the landscape as new regulations and other changes kick-in.”

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NPA

Gross non-performing assets (NPA) in Indian banks are expected to rise to Rs 9.5 lakh crore by March, from Rs 8 lakh crore in March last year, said a ASSOCHAM-Crisil joint study.

Stressed assets in March 2018 are expected to be at Rs 11.5 lakh crore, the report titled “ARCs headed for a structural shift,” said.

“High level of stressed assets in the banking system provides enormous opportunity size for asset reconstruction companies (ARCs) which are an important stakeholder in the NPA resolution process,” ASSOCHAM said in a statement quoting the study.

It, however, said that owing to capital constraints, growth of ARCs is expected to come down significantly.

“While growth is expected to fall to around 12 per cent until June 2019, however the AUM (assets under management) are expected to reach Rs 1 lakh crore, and that is fairly sizeable.”

The study added that with banks expected to make higher provisioning over and above the provisions made for stressed assets, they may sell the assets at lower discounts, thus increasing the capital requirement.

The study also said that effective implementation of the Insolvency and Bankruptcy Code would be a remedy to the challenge of prolonged litigation and it can help improve the recovery rate of stressed assets’ industry further.

Power, metal and construction sectors contribute the bulk of stressed assets. According to an analysis of 50 stressed assets (forming nearly 40 per cent of stressed assets in the system), sectors like metal, construction and power form nearly 30 per cent, 25 per cent and 15 per cent respectively, while other sectors together form the remaining 30 per cent.

The report stated that 2018 would see a structural shift in the stressed assets’ space as increased stringency in banks’ provisioning norms for investments in security receipts (SRs) is likely to result in more cash purchases.

“Fiscal 2018 marks beginning of third phase of ARCs which promises to change the landscape as new regulations and other changes kick-in.”

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