Come December and it is time to make your New Year plans. Obviously, it is not going to be restricted to just dining out on New Year's Eve. Your celebrations will include getting together with friends, probably inviting them for a stay over at your place, overnight celebrations at one of the night clubs or even a vacation to an exotic resort within India or abroad to usher in the New Year. Normally, the New Year is when the price of most of these services tend to touch new highs on the back of robust demand. But this time around, it could be different. The GST rates on a plethora of items was reduced drastically in November. In fact, nearly 177 items constituting nearly 3/4th of the total list of items in the 28% GST bracket saw a sharp cut in GST rates. So, what does it mean for your New Year Plans?
Eating out could get a tad cheaper this New Year..
Your restaurant bill in the post GST scenario attracted 18% tax on the food bill. In addition, most of the restaurants also charged service tax to the tune of 10% and the final cost you ended up paying was substantially higher than the list price. For this New Year you could see some relief. This New Year when you eat at your favourite restaurants, you will pay GST of only 5%. This is sharply lower than the 18% that was originally being charged. Thus, your food bill is likely to come down sharply during this New Year celebrations. But there is a catch here!
With the reduced rates of GST, these restaurants will forfeit the input tax credit. In fact, many restaurants have complained that the loss of ITC is a big loss to them and hence have raised the list price of most items. That is far from the truth! You can be smart to bargain for a discount from your restaurant and most restaurants will be more than happy to provide you direct or indirect discounts packaged in various formats. You can make the best of it. However, this does not apply to 5-Star restaurants as they will continue to attract the peak tax rate of 28%. You have to be wary of that!
In fact, New Year could be the time to give your home a spruce-up..
A host of consumer items have seen their peak rate of GST reduced from 28% to 18%. That includes a host of home improvement products like furniture, fans, electric appliances, lights, sanitary ware, glass ware etc… In all these cases the GST has been reduced from 28% to 18%. Hence, if you had been postponing your home sprucing decision in the past, you can go for it this New Year. The lower GST should substantially reduce your cost of furnishing your house. Not just your home furnishings but even useful products like travel bags, suitcases, wall clocks and watches have all seen the GST rate fall from 28% to 18%. This 10% fall in tax could make your overall shopping bill much lower this New Year. You can surely afford to binge!
Personal effects cheaper and you can afford to gift confectioneries..
Your personal effects like hand bags, vanity cases have all just gotten cheaper as the GST rate has come down. Even personal effects like hats and spectacle frames have seen the GST rate coming down from 18% to 12%. The good news is that you can be a little more liberal in your shopping list this New Year as lower GST is going to be easier on your purse. Most of your perfumes and other beauty effects are also cheaper by 10%. Above all, New Year is also the time to gift confectioneries to your friends and relatives. But the steep costs were always the issue. There is good news here too! Chocolates, malts, waffles are all likely to attract just 18% GST as against 28% GST prescribed earlier. That is likely to be a substantial cost reduction. So, go ahead this New Year. Indulge yourself and also gift boxes of chocolates and goodies liberally to your near and dear ones..
So, all your New Year shopping items are likely to get cheaper compared to last year. Not to forget, your household budget may also look more comfortable with lower GST impost on most food items. That means, you are left with more surplus to splurge this New Year. Even as you make your New Year resolution to be a smart and prudent investor next year, don’t forget to have a good time this time around. The government has made life a tad easier for you. As well you make the best of it with your near and dear ones..
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