What Consumers Need To Know With New GST Rate From 1 Jan 2024

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Published Date:  13-12-2023   Author:   shraddha-vaviya
what consumers need to know with new gst rate from jan

The most significant tax reform in the nation, known as the Goods and Services Tax (GST), unites the tax system and lowers the variety of taxes implemented under the previous government. The frequent GST Council meetings aim to progressively enhance the overall GST rates for various commodities.

Several states and sectors support a lower GST tax rate for various commodities discussed at council meetings. According to the sources, the whole redesign of the four slab tax GST rates under the system is expected to be discussed by the panel of ministers led by Finance Minister Nirmala Sitharaman. 

In addition to raising the lower rates from the present 5% and 12% to 6% and 13%, the sources also reported that the GST rates would eventually be combined into a smaller slab. The specifics behind the increase in the GST rate will become evident soon.

Which Prices Should We Look at?

Businesses that have registered for GST are required to show the public GST-inclusive pricing on their price displays. The price you ultimately pay must match what you see. Prices listed by GST-registered companies must include GST at 9% as of January 1, 2024. Companies that can’t change their price displays overnight might put up two prices:

Date of Invoice and Schedule of Payment GST Rate
The invoice is dated prior to January 1, 24 and the entire payment is received prior to January 1, 24. 8%

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In addition, up to December 31, 2023, the value of delivered goods or rendered services will continue to be subject to an 8% GST rate. since the supply has been established.

The invoice, which includes maintenance support and ASP prepaid services, is dated before January 1, 24 and the entire payment is received after December 31, 23. A 9% fee will be applied to the portion of the contract that is not used. The contract’s utilized portion will stay at 8%.
The invoice is dated after December 31, 23. 9%


GST transitional rules might be relevant for transactions made after January 1, 2024. A transaction is deemed to have occurred during the GST rate shift if any one or both of the above occurrences occur entirely or in part on or after January 1, 2024:

  • The supplier issuing the invoice
  • The supplier’s receipt of payment
  • The delivery of goods

If the supplier treats sales made during this time as sales of the previous day, you can be charged GST at 8% on purchases made from 24-hour outlets on January 1, 2024, from 12 a.m. to 7 a.m.

Leaving excludes lodging facilities, food, and beverage businesses that don’t charge a service fee, and those that charge a little service fee but don’t have a legitimate business purpose for doing so other than to avoid showing prices that include GST.

Current GST Slab Rate Update

Basic Savings Bank Deposit (BSBD) accounts opened under the Pradhan Mantri Jan Dhan Yojana (PMJDY) are eligible for chargeable services.

March 31

For M/s. Oswal Poly Rubbers, the Haryana AAR, has made the ruling public. It charged the PVC cushion mats an 18% GST.

February 20

The revised rates for pencil sharpeners and Rab in the 49th GST Council meeting have been announced by the Indian government in a press release. 

July 22

Kerala’s Finance Minister, K N Balagopal, refuted claims made by India’s Finance Minister Nirmala Sitharaman that even states without a BJP government support the taxation plan, stating in a statement on Thursday that the state had repeatedly expressed reservations over the imposition of the GST rate on certain packaged foods.

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July 20

The GST Council states that if an item is sold loose without being packaged or labeled, it is not subject to GST. The GST Council, not any one member, makes the final decision. The decision-making process is explained in 14 tweets.

Items Probably to Be Introduced at GST Slab Rates

To incorporate a few additional products into the GST system, the government is considering implementing some new strategies. The Finance Minister made a similar suggestion, stating that the government might lower the tax rates on some goods and add other things under the GST. 

The following are the eagerly awaited goods to be introduced under the GST rate slab:

  • Petrol and Diesel
  • Land
  • Electricity
  • Others

Impact of GST on the Indian Economy


captainbiz impact of gst on the indian economy

The net acceptable pricing for products and services under a single taxation system made establishing the products and services tax (GST) possible, which has completely upended the Indian economy. 

The following is a summary of some significant effects of the GST rate on the Indian economy:

Growth in Output and Increasing Competition

Since the country’s implementation of the products and Services Tax (GST), the cost of products and services has decreased, resulting in a lower tax burden for the final consumer. It has been observed that the GST system has broadened the potential for higher production, hence boosting competition. 

Easy Tax Structure 

The introduction of the GST, or single taxation system, has dramatically streamlined the process of calculating taxes. Furthermore, time and money have been saved by replacing the numerous taxes in place. 

Simplified Tax System 

Formerly, taxpayers were perplexed by the numerous taxes that applied at practically every point of the supply. However, the country now has a unified tax structure for simple collection thanks to the GST. 

Growth in Exports

Production costs have been declining since the Indian economy was subjected to the Goods and Services Tax. As a result, there is now more competition in global markets, which directly influences exports.

Protest Against The GST Rates

After its adoption, private security businesses, fabric merchants, and other traders protested the GST rates. The iron, wire dying, and steel traders opposed high GST rates, while the cloth merchants protested against the new tax regime’s 5% sales tax on textiles. 

The steel merchants were exerting pressure to demonstrate that the high rates of GST and complex paperwork caused the 40% decline in trade.

Also, the proprietors and staff of security companies staged a secret demonstration against the 18% GST rate imposed on security services, claiming that the higher taxes had significantly reduced pay and perks. 

GST Charges for Services

The government announced the implied GST on services, which has a 4-tier tax system akin to that of goods. The 5%, 12%, 18%, and 28% GST rates on goods positively and negatively impacted consumers’ use of services. 

However, services like medical and educational care were not subject to GST. The GST Council passed rate slabs that include NIL, 5%, 12%, 18%, and 28% rates for various services. A few of them are listed below in multiple categories. 

GST on Loans and Advances 

Before the introduction of the GST, a service tax was applied to the distribution of loans. The 15% service tax rate has been raised to the 18% GST rate. Many believe that higher GST rates (by 3% above Service Tax rates) will result in an increase in the adequate loan amount. 

Others assert that higher GST rates will result in more EMIs. But people’s concerns about GST not being collected upon loan repayment or interest payment would also be allayed.  

Instead of the principal repayment and interest payment amount, GST is applied to processing fees and other charges. The included charges include but are not limited to, loan processing and loan payback charges, if applicable. 

The GST impact on loans would typically be minimal because principal and interest payments make up the majority of loan repayment. View the aforementioned GST effects on loans to gain an improved understanding of the impact of GST. 

This part includes a list of significant loans along with the appropriate GST rates.

  • Personal Loan– 18%
  • Home Loans– 18%
  • Car Loan– 18%

Wrapping It Up

Customers must be aware of the changes and be ready for them once the new GST rate takes effect on January 1, 2024. It is essential to comprehend how these changes may affect individual spending patterns, personal finances, and way of life in general. 

Consumers can better navigate this change by keeping up to date on the revised GST rates, consulting financial consultants for help when necessary, and modifying their spending habits accordingly. A smoother transition to the new GST regime and the mitigation of any unforeseen economic issues can be ensured by individuals adopting proactive steps and being mindful of the altered tax landscape.

FAQs

  • What is the 2024 SG GST rate?

As part of the two-step GST rate hike announced by the Minister for Finance, the GST rate will increase from 8% to 9% on January 1, 2024.

  • Which four types of GST are there?

The Central Goods and Services Tax (CGST), State Goods and Services Tax (SGST), Union Territory Goods and Services Tax (UTGST), and Integrated Goods and Services Tax (IGST) are the four different versions of GST.

  • Who is the GST CEO?

The finance minister is in charge of the GST council. Nirmala Sitharaman is the GST Council’s current chairperson.

  • Who is GSTN’s owner?

In accordance with the GST Council’s decision, the Central and State Governments will receive the shares held by non-government Financial Institutions, enabling them to jointly possess 50% of GSTN and turn it into a fully government-owned enterprise.

  • How is the GST computed?

GST Amount = (Original Cost*GST Rate Percentage) / 100.

  • What is the GST HSN code?

The “Harmonized System of Nomenclature,” or HSN code, is a global system for classifying commodities.

  • What is the complete form of VAT?

The Central Government of India imposes Value Added Tax (VAT) as a type of tax on the sale of goods and services to consumers. 

  • For whom is the composition scheme ineligible?

Companies that sell through e-commerce operators make non-taxable supplies or participate in interstate commerce and are typically ineligible for the GST composition scheme.

  • Why is an electronic invoice used for GST?

Through the e-invoice system, B2B invoices are electronically verified by GSTN before being used on the shared GST portal.

  • In GST, what does G stand for?

A tax levied indirectly on the delivery of goods and services is known as the goods and services tax, or GST.

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Shraddha Vaviya

With several years of experience, I am deeply passionate about writing and enjoy creating content on topics such as GST, tax and various finance-related subjects. My goal is to make complex financial matters understandable for readers by simplifying them.

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