Goods and Services Tax – GST – By: – Craig Dsilva – Dated:- 24-7-2017 Last Replied Date:- 30-12-1899 – Weekends don't count unless you spend them doing something relaxing. With the introduction of the Goods and Services Tax on 1st July 2017 spending on leisure or recreation activities is expected to burn a hole in your pocket. Below is a sample illustration: Mr X and Mrs X are newly married. They are in their early 30 s. Mr X earns 7 Lakhs p.a. while Mrs X earns 7.56 Lakhs p.a. Hence their total income is 14.56 Lakhs (assuming net take home pay). They decided to follow a simple process of spending 25% of their income on Savings, Investments, Necessities and Recreational expenses respectively. 25% of ₹ 14.56 Lakhs is ₹ 3.64
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200 28% 2240 1,040 9 Shopping Mall (Branded Merchandise) 9000 12.5% 1125 18% 1620 495 10 Yacht Cruise (2 Hours) 10000 18.5% 1850 28% 2800 950 11 Casino/Betting (Horse Race) 11000 18% 1980 28% 3080 1,100 12 Upgrading Gadgets (Once in 3 Months) 12000 6% 720 12% 1440 720 13 Resort Vacation 2N/3D (Tariff>2500) 13000 22.5% 2925 18% 2340 (585) Total 91000 Net Increase 4,545 *Note: This refers to the average rate of tax in India. It includes Entertainment tax, Service Tax, Value Added Tax and other local body taxes. As you can see from the sample illustration above, the couple will have to spend 5% {(4545/91000)*100} more on recreational expenses on account of GST. Leisure lowers Stress and Depression. Mental wellness is an important part of yo
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iddle class person usually in a 3 star with a tariff of ₹ 5000 the person spends ₹ 900 as GST i.e. at the rate of 18%. If a rich person books a hotel room in a 5 star, with a tariff of ₹ 15000 the person spends ₹ 2700 as GST at the same rate of 18% which is more than the ₹ 900 spent by the middle class person. If the person is taxed at the current rate of 28% for 5 star hotel room then the person has to spend Rs 4200. The rich person will argue that this is a double punishment, since such a person is already paying more income tax charged at a higher slab rate. Irrespective of the view and counter view mentioned above, Mr X and Mrs X will realise that there is an increase in their weekend expenses at an average
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