GST changes from January 1: The new year, 2022, is expected to see a host of changes in terms of the Goods and Services Tax, or GST, in India. The changes had previously been notified by the government and will come into effect from January 1, next Saturday. The changes include requiring e-commerce operators to pay tax on services provided through them in the form of passenger transport or catering services. In addition, the correction of the reverse duty structure in the footwear and textile sectors would come into effect from Saturday, where all footwear, regardless of price, will be subject to GST at 12%, while all textile products, except cotton, including ready-to-wear garments will have 12%. GST.
Here’s how the GST changes from January 1 will affect you:
The prices of ready-made clothes and shoes will increase
Starting January 1, be prepared to shell out more money on your favorite dress or shirt as well as your shoes, as the government will start charging 12% GST on these items instead of the previous 5%. According to a government notification, all footwear, regardless of price, will be subject to 12% GST. On the other hand, all ready-made textiles, with the exception of cotton, will also be subject to a 12% GST. Previously, these items were sold at a rate of 5% GST.
Opposition parties have opposed the move, with West Bengal Finance Minister Amit Mitra saying 15 million jobs will be lost as a result. The cotton sector is already reeling from 70% inflation, he said, adding that the government’s estimate of earning an additional Rs 7,000 crore from the tax increase is mythical as many units could close as a direct result of the tax hike. . He had accused the Center of not discussing the issue within the GST council before announcing the hike.
Online transportation services will be subject to GST
Online transportation services like Ola, Uber and its ilk have become an integral part of many people, especially those in metropolises. Automobile or taxi services, when provided through an e-commerce platform, would become taxable from January 1, 2022, at the rate of 5%, the government announced. Previously, the government used to charge a 6% service charge to app or radio taxi passengers and this move will slightly reduce the fares for your Ola or Uber ride starting in the new year. However, these rules will not apply to passenger transport services provided by auto rickshaw drivers in offline/manual mode, which are not taxed.
Swiggy/ Zomato will charge GST
From January 1, 2022, the procedural changes mentioned in the point above would come into effect for all e-commerce operators, including like Swiggy and Zomato. Food delivery apps would be required to collect and file GST with the government on catering services provided through them from January 1, which is next week. They would also be required to issue invoices for these services.
However, there would be no additional tax burden for the end consumer, as currently restaurants collect and deposit GST. However, deposit and billing compliance has now been moved to food delivery platforms. The move comes after government estimates showed that the tax loss to the Treasury due to alleged under-reporting by food delivery aggregators is Rs 2,000 over the past two years.
(With PTI inputs)
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