GST Rate Predictions & Repurcursions

[Nikhil]

Was chatting with FM Sidvee and it appears that the GST rate for audio is going to be as high as 25% - 28% depending on different sources. How much do you think is the new GST rate going to be for audio? It doesn't look very good based on this outlook.

Anybody knowledgeable on these matters? Would be interesting to get the opinions of D&Ds as well.

Regards.

 

[panditji]

All the more reason to buy from abroad and see a new country on this planet as well while saving money..... On a serious note, with an increasing $ and higher taxes, the dealers should look at group buys to reduce their cost and risk as thus being able to offer competitive prices...

 

[Nikhil]

The impression is that GST will take some time to be implemented.
The dates I was hearing is Sep 2017 so there is some time.
However, things can change very quickly.

The subject is pretty complicated but the hope is that double taxation will be removed.
At the moment, there is an estimate that we are shelling out about 18% on double taxation alone.
The babus are going to fight this to the end - they are making a killing right now.

 

[panditji]

Ideally, goods manufactured within the country should become cheaper due to removal of double taxation and cheaper,faster transportation (no queues and bribes on the state borders). A lot of small businesses make cash transactions while purchasing raw materials due to excise and local taxes and that will be gone going forward...

Goods which are imported will cost a little higher depending on the type of goods and the new taxes applicable...

 

[filmguy]

what is the consensus, should one hasten any possible purchases of consumer electronics or wait and see? will rates change after budget?

 

[Nikhil]

If you have a purchase on the horizon, then definitely consider closing before the GST comes into force.
Prices are going to be higher on the whole until the entire system gets streamlined.

 

[drkrack]

If you have a purchase on the horizon, then definitely consider closing before the GST comes into force.
Prices are going to be higher on the whole until the entire system gets streamlined.

Yes precisely, at least for 1 yr they're going to be higher by 20% after GST implementation , will fall to much cheaper levels thereafter (this is the prediction for luxury items in general, hifi will be under the same taxing bracket).

 

[Fiftyfifty]

Dealers are encouraging us to buy before GST. Did you guys not get a mail from Jochen?

As Nikhil pointed out, if there is a purchase on the horizon, it makes sense to decide based on what is known, rather than gambling on how GST is likely to impact the price.

 

[filmguy]

will that 20% hike be after budget this month, or after gst implemenation ie post Sep?

 

[reignofchaos]

Won't GST's 28 percent tax subsume Customs Duty, CVD, VAT combined? I'm pretty sure that the combined rate of all those things will be significantly more than the 28% GST being asked for. Not sure why this scare mongering is going on.

One thing that will change though is that personal imports on which we only paid customs duty+cvd and no VAT will definitely become more expensive.

 

[panditji]

IMHO the GST would be imposed on top of the customs duty at the final sale to the consumer...They might do away with the additional CVD of 4% as the process of claiming refunds is an unnecessary burden...

 

[reignofchaos]

IMHO the GST would be imposed on top of the customs duty at the final sale to the consumer...They might do away with the additional CVD of 4% as the process of claiming refunds is an unnecessary burden...

Oh well then expect a huge increase in prices of electronics and speakers

 

[panditji]

The costs for the dealers are going to reduce a little bit depending on how much they show as customs value but the taxes will increase to 18% from 12.5% (or whatever the rate is for general electronics since there is no category for Hi-Fi) ... so ideally the increase should be around 3-4% if the rupee stays the same...

 

[sidvee]

... so ideally the increase should be around 3-4% if the rupee stays the same...

I read in ET that there will be 4 slabs of GST, 5%, 14%, 18% & 28%. Luxury goods will be placed in 28% bracket. Current VAT on most audio equipment is 14%, however if they place higher priced items in the luxury bracket, then prices likely to go up by 10% i.e; if $ stays the same. It is anybody's guess what higher price/or luxury is, for instance air travel is defined as a luxury by the Indian Govt.
Cheers,
Sid

 

[naviworks]

Was chatting with FM Sidvee and it appears that the GST rate for audio is going to be as high as 25% - 28% depending on different sources. How much do you think is the new GST rate going to be for audio? It doesn't look very good based on this outlook.

Anybody knowledgeable on these matters? Would be interesting to get the opinions of D&Ds as well.

Regards.

I think everyone is missing 'Central Excise duty' completely. Every product on sale today is inclusive of excise duty which is an indirect tax. Because we are generally not aware what % excise duty is added already to an item on sale .


GST is going to remove all those indirect taxes. We are only going to pay Manufacturers' cost + GST thats it. There is a possibility that the end price may be lesser than what it is now. 25%-28% GST appears to be high however be rest assured that it is not on top of todays MRP.


Disclaimer: i am not an expert or economist and the above information may be wrong too. i am too lazy now to research and give you facts. Google yourself. Peace.

 

[Hari Iyer]

Ideally, goods manufactured within the country should become cheaper due to removal of double taxation and cheaper,faster transportation (no queues and bribes on the state borders). A lot of small businesses make cash transactions while purchasing raw materials due to excise and local taxes and that will be gone going forward...

Goods which are imported will cost a little higher depending on the type of goods and the new taxes applicable...

I think importing will be expensive as basic custom duty will still be applied. Also the IGSt will be charged on the import goods which cannot be setoff as there will be no output IGST on which the trader could setoff. All in all imports will be more expensive.

 

[Hari Iyer]

Won't GST's 28 percent tax subsume Customs Duty, CVD, VAT combined? I'm pretty sure that the combined rate of all those things will be significantly more than the 28% GST being asked for. Not sure why this scare mongering is going on.

One thing that will change though is that personal imports on which we only paid customs duty+cvd and no VAT will definitely become more expensive.

There is going to be no CVD & VAT on imports but just custom duty and IGST. Since import suppliers can take input credit on IGST if they distribute outside the state of import. Since within the state SGST & CGST will apply it will be difficult to get these setoff.

In short - if the importer is in Mumbai then he can sell goods at a much lower price outside the state of Maharahstra as he can avail the input credit on IGST. But within Maharashtra since he is paying SGST & CGST he will not get any input credit for the IGST which he has shelled out during importing hence making it expensive to sell inside Maharashtra.

 

[Hari Iyer]

I read in ET that there will be 4 slabs of GST, 5%, 14%, 18% & 28%. Luxury goods will be placed in 28% bracket. Current VAT on most audio equipment is 14%, however if they place higher priced items in the luxury bracket, then prices likely to go up by 10% i.e; if $ stays the same. It is anybody's guess what higher price/or luxury is, for instance air travel is defined as a luxury by the Indian Govt.
Cheers,
Sid

buying diy kits will prove to be much cheaper to built in this scenario as 28% GST will inflate the final product cost way too high. Again this depends upon the source of goods within-state or outside state and sale of goods within state / outside state where the input tax credits can be availed accordingly.