At the stroke of midnight on 30th of June, 2017, the Indian government rolled out the much-awaited Goods and service tax (GST) with the conviction of creating “One Nation One Tax”.
So what is Goods and Service Tax all about, and how will it impact business sectors such as electronics, real estate, works contract, and what we do at Symphony 440 DG? Please read our blog to learn more>>
On the 1st of July, with the Goods and service tax (GST) implementation, India witnessed the most significant tax reform since Independence.
GST is one national tax introduced to eliminate the existing “tax on tax” or cascading tax system and create a single marketplace.
GST broadly defines 4 tax slabs – 0%, 5%, 18%, and 28% – for all goods and services in India. While all consumers have to pay the stipulated Goods and Service Tax for good and services they avail of, any business with an annual turnover above 20 lakhs will also be liable to pay Goods and Service Tax.
Impact of GST on electronic appliances:
TV, fridge, washing machine, vacuum cleaner, chimney, laptop, computers, and other electronic gadgets that have become an inseparable part of our lifestyle will retail at 18% GST. Before the Goods and Service Tax, Tax on these electronic goods was around 25-26%.
Other electronic devices that fall under this tax bracket include sound recording/reproducing apparatus, video recording/reproducing apparatus, Studio monitors, High-End home theater speakers, insulated wires, insulation boards, acoustic sound panels, outdoor speakers, electric switches, sockets, plugs and more.
Impact of GST on real estate:
Before implementing GST, a homebuyer had to pay a score of indirect taxes such as excise duty, value-added tax and service tax. And an additional stamp duty and registration charges would burn a hole in the buyer’s pocket.
Goods and Service Tax will eliminate these multiple taxes and double taxations. This could be good news to all home buyers as it simplifies taxes even if it means paying a little more in higher GST.
Since the real estate sector accounts for about 5% of India’s GDP, the economic growth induced through GST would increase the demand for real estate and bring in a substantial boost to the sector.
Impact of Goods and Service Tax on construction works:
GST rate for works contract is 18% – which is higher than the previous tax rates that ranged from 11-18%. Work contracts are a mix of both goods and services. Works contract includes constructing new buildings, installing electric and electronic devices, renovating and restoration services.
Work contracts are likely to benefit from GST as input tax credits would be available for raw materials. However, construction projects under progress could feel the heat of GST if there is limited scope for renegotiation.
Impact of Goods and Service Tax on Symphony 440 Design Group Services:
Materials such as High-End Home Theater Systems, home theater projectors, screens, plywoods, sound dampening materials, insulation boards, and other construction materials that go into building home theatres, music studios, and auditoriums will fall under the 18% GST slab.
Though this increase in tax rate seems to be heavy, it will benefit our country’s GDP in the long run. A well designed and implemented GST could boost India’s Gross Domestic Product (GDP) by 2-2.5%
Do you have any questions on what services we provide and how much do they cost? Please feel free to reach out to us at [email protected] and +91 9986165200
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