Now that the GST is around the corner, know its likely impact on a household comprising four members 2 adults and 2 kids and in the middle income bracket. Though, the roll out of GST would not make substantial difference in their budget much would depend on the individual's consumption pattern and preferences.
General household budget for grocery and other kitchen items shall have neutral impact
In the daily need items category, some of the items shall be made cheaper say for instance, oil, butter, butter, chicken while some of the other items shall be made dearer by 1-5%. For instance, tea, coffee, spices, cheese, curd and other bakery items and also chocolates and icecreams.
Paneer, cornflakes etc are also put in a higher tax bracket under GST.
All in all the gains due to price fall in some items shall be negated by price hike in others.
For, toiletries also the rates have been reduced from the pre-GST rates of 36-40% to 12-28%
While tution fees and children's coloring books have been kept outside the purview of GST, exercise books shall attract a tax rate of 12%. Other amenities as well as stationery items are put under 18% tax bracket.
Budget with respect to financial planning would move upwards from July 1
As the tax under GST for financial services has been revised from 15% to 18%, you will now have to shell out additional 3% for buying insurance policies. Also, borrowing would also increase from diferent financial institutions.
Budget In respect of Telephone Expenses for data as well as voice functions shall also be increased
As reported in The Economic Times, the 3% increase in tax rates for telecom companies shall be passed on to primarily pre-paid customers. The companies are said to absorb fully GST on select repaid data packs and full talk time data vouchers
Big Ticket Purchases Such as Real Estate Investment would also mean additional tax burden
Earlier the taxation on property purchases attracted 3.75 % and 4.5% service tax for property priced upto and over Rs. 1 crore respectively. But from on a uniform rate of 12% GST shall mean an additional burden of approximately 7.5%. It is to be noted that some of the states also levy VAT on property purchases such as Maharashtra charges 1% VAT.
Entertainment Budget shall go down
With the rates under GST brought down from the existing rates of 22% to 18%, you shall be able to save few bucks on this front.
Other luxury spending such as would move the budget not higher by more than 2-7%
Consumers incurring money on buying premium segment cars or sedan shall also be required to pay an amount higher by not more than 2-4%.