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Latest GST Rule Updates: What Got Changed?

The nationwide goods and service tax (GST) has taken another turn in the past week. On 18th January 2018, the latest update to GST brought in an array of changes for businesses and consumers alike. The tax slabs have been revisited, along with the much-anticipated e-way bill introduction. If you are confused about the changes, read on for a clear understanding of the new updates!

GST Update 8th Jan

The primary revisions to the tax slabs are under the 5%, 12% and 18%. The updated list is as follows:

New heads under 5%:

LPG supply, all restaurants, restaurants of hotels under tariff of 7,500 INR, food parcels, transport services, tailoring services, scientific and technical instruments

New heads under 12%:

Drinking water (20l), bio-diesel, biopesticides, drip irrigation system, state-run lotteries, non-AC hotels, business class air ticket, fertilisers and work contracts

New heads under 18%:

Second-hand medium and large cars, bio-fuel powered buses, admission to theme parks, restaurants in hotels with tariff of 7,500 INR or more, telecom and IT services, branded garments and financial services, and outdoor catering

The other major updates has been the introduction of the new nationwide e-way bill system for interstate goods movement. From 1st February, 2018, interstate goods transport worth more than 50,000 INR will need to be secured by the seller through online registration. The transporter shall be required to carry a copy of the e-way bill thus generated as a proof of sale.

The positive features of the e-way bill are that these only need to be verified once, and shall be created in standard formats across all states. A seller can also issue bulk e-way bills for multiple consignments, an issue which formed much difficulty earlier. However, what many people are considering a downside is that the recipient’s acceptance is required on the e-way bill within 72 hours, making long-standing consignments an impossibility.
GST Knowledge Base: Refund Process Under GST

The e-way bill for interstate goods movement has already been rolled out on trial basis starting 16th January, 2018 to make the businesses transition smoothly, before it comes in effect starting February. The e-way bill system for intrastate goods movement is expected to get in place by 1st June, 2018 as well.

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GST: A Common Man’s Guide to its Role & Impact on Everyday Life

Since its introduction, GST has brought in a variety of opinions, right from the economists and political leaders to pundits and even the common man. It has been a good five months since GST came into effect, and we even had quite a few months prior for preparation. However, the general public still does not understand GST and its tax implications across various industry sectors correctly.

This blog is conceptualized as a short guide for beginners, covering the major pain points people have, the challenges and benefits they might face, and how far will the GST impact be felt.

What is GST?

GST or Goods & Services Tax has been called one of the biggest tax reforms of the country. It has replaced all other applicable taxes, for eg., service tax, VAT, excise tax and so on, with a singular tax rate that only varies according to the industry.

Who is required to pay GST?

GST is to be paid to the government by manufacturers, sellers and service providers. It is not something that directly affects the end consumer, though it will end up getting added to the bill just as it happens currently.
GST Payment Guide

Do the GST rates vary?

GST Rates - Easy-GST

The latest update back in November 2017 has pegged the GST rates at 5%, 12%, 18% and 28%.

  • GST @ 0%: Education & Healthcare Sectors, Milk, Salt, Fresh Vegetables, Unbranded Honey & Paneer, Jaggery
  • GST @ 5%: Kerosene, Domestic LPG, Coal, Tea, Edible Vegetable Oil
  • GST @ 12%: Non-AC Restaurants, Butter, Ghee, Mobiles, Almonds, Jams & Jellies
  • GST @ 18%: Restaurants serving alcohol, Capital Goods, Industrial Intermediate Items, Computers
  • GST @ 28%: Small cars, High-end motorcycles, Consumer durables, Luxury items

How is GST going to be implemented?

A Dual GST model is currently being implemented in India. Equal percentages are collected by both, the State as well as the Center. Your usual restaurant bill would look as follows:

Amount: 1000/- INR
SGST: 9%
CGST: 9%
Net Total: 1180/- INR
There is also one more kind of GST that would only be applicable for Inter-state sales, called the IGST.

How will GST majorly impact you?

The common man would mostly end up benefitting from the new GST rates in place. The benefits would be most felt in segments such as Real Estate, Cabs, Low-tier Hotel Stays, Air Travel and Household Expenses. A small blow might be felt in other segments such as Luxury Goods & Holidays, Tobacco, Drinks and similar.

Change has never been an easy pill to take, especially in an economy as large and widespread as India. There already are anti-profiteering mechanisms built-in in the new GST regime, however it will definitely take some time for businesses to adjust the price hikes and control the economy from blowing up. Meanwhile, the law promises to bring much-needed transparency to taxation by leveling the state and center taxes, as well as by eradicating all of the other middle-level taxes which could be exploited.

The system is changing from a production-based to a consumption-based economy post introduction of GST. The long terms benefits include price falls, easy accessibility, growth of infrastructure and economy on large-scale levels, and much more!

Do let us know your viewpoints in the comments below on how GST is impacting you as a businessperson or a consumer over the past few months, and how you envision the new taxation laws to support Indian economy in the future.