- 07/27/2019 at 7:17 am #1517275EduGorillaKeymasterSelect Question Language :
Direction: Read the given passage carefully and answer the questions that follow.
Goods and services tax (GST) comes into effect from 1 July. There will be an impact on some basic expenses in the household consumption basket. The price difference will be bigger for SUVs (55% to 43%) compared to small cars (30% to 29%). While premium of term plans and non-life policies are taxed, only charges (mortality and AMC charges, etc) in other life policies attract GST. The yellow metal will become dearer as there will be 3% GST on gold and 5% on making charges. If you settle for a room that costs less than Rs 1,000, there will be no GST to pay. Then it rises progressively. Anything above Rs 5,000 will attract 28%. Hair oil prices will stay high due to 18% GST. But coconut oil being refined cooking oil, will be taxed at 5%. Taxation gap between economy and business class has increased with GST. While those travelling by local trains or in sleeper class are not affected, first-class and AC compartment travellers will pay more. Since telecom services will not get much input credit, you have to bear the burden of hiked rates. A non-AC eatery will only charge 12% GST. However, eating at a restaurant in a 5-star hotel will mean shelling out 28% in GST. Due to industry pressure, GST on garments priced below Rs 1,000 has been brought down from 12% to 5%. Reduction in GST for tickets up to Rs 100 will benefit single-screen cinemas in small towns. There are certain items that have been exempted from GST which include all unprocessed cereals like rice, wheat, etc., all unprocessed milk, vegetables, meat,fish, etc , education, healthcare (but not medicines), hotels, lodges with room rent less than Rs 1,000, kid’s colouring /drawing books etc.
What can be inferred from the difference in imposition of GST on different items?
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- There is no specific pattern in the imposition of GST on different items.
- Rich people will have to pay more GST to purchase luxury items
- Poor people will have to to pay more GST.
- More GST is being imposed on items of basic needs.
- GST has been randomly applied on items based on various groups of consumers.
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