GST is calculated based on 4 slabs of taxation – 5%, 12%, 18% and 28%. You can use the GST calculator in India available at multiple online sites to help you calculate incurred taxes on your business.
Impact on automobile sector
As per a recent update, a 10% rise in cess has been implemented by GST council (25% from the existing 15%). Moreover, motor vehicles capable of carrying more than 13 heads will incur a 25% cess.
Impact on real estate
Under the Goods and Service Tax scheme, under-construction properties now incur 12% GST on the existing property value which was previously at 6%.
Impact on FMCG sector
Previous taxation system incurred around 22-24% with GST, it is at 18%.
Impact on logistics
Rates on logistics have dropped from 2.7% (approx.) to 1.5%. This means, the net prices of consumer goods are expected to fall considerably.
If you are planning to expand your business or its operations and avail a business loan GST impact on it is now 18%. This is likely to increase the potential growth opportunities available to business owners. This is good news for businesses wanting to increase their working capital.
Increase in GST is likely to make sourcing, distribution and warehousing easier and quicker among states. As businesses may be free from inter-state taxes it will increase cash flow needed to expand the business. Other than that this will likely boost demand and consumption cycle, it simplifies indirect tax collection for the government and the taxpayer.
Also Read: Understanding GST and its Impact on Different Businesses
Aman Khanna is an experienced financial advisor who is well known for his ability to foretell the market trends as well as for his financial astuteness. He has an MBA in finance from Toronto University as well as years of experience delivering seminars on sound financial practices and debt management.