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Saturday, July 22, 2017

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5 Myths and their reality about GST

GST has been finally implemented throughout the India from 1st July 2017. But as there is a lack of information about the new tax system, myths about the same is increasing in the market.

Myths about GST
5 Myths and their reality about GST
GST has been finally implemented throughout the India from 1st July 2017. But as there is a lack of information about the new tax system, myths about the same is increasing in the market.

In this article, we are going to talk about the 5 myths of GST and reality about the same. If you have any other confusion about the GST you can contact us through the comment section below and will be happy to solve the issue.

Eating out is more expensive now

Not necessarily. Earlier there was a service tax of 6 % on the total bill amount (for AC restaurants) and a VAT which varied from one state to another. 

One nation one tax was just a political jumla

This is probably the most common GST myth doing regular rounds of social media. Many people are confused with the terms SGST, CGST, and IGST.

The main source of confusion is SGST and CGST. However, the truth is that both SGST and CGST are part of the same tax. If the rate is 18 % percent, for instance, SGST denotes the part that goes to the state and CGST is the part that goes to center.

You need to pay GST twice if you pay electricity bills through credit cards



Doubly untrue. First of all, there is no GST on electricity. Also, there is no GST on making expenditure through credit cards.

Out of all GST myths, this one is as false as it gets.

Tax rates are much higher now and India has the highest GST rate of 28 %

It only appears so. Earlier there were many different indirect taxes which have been merged into one now. That is the reason that the combined rate appears much higher now, when in fact, it is not.

As for the tax rate of 28 %, India has different slab rates for different items out of which 28 % is the highest. It is applicable to items like small cars and SUVs.

81 % percent of items fall under the slab rate of 18 % or lower.

It is noteworthy that many food items come under the tax slab of 0 % and alcohol is outside the purview of GST altogether. There are many food items which were taxed at the rate of 5 % and now fall under the 0 5 tax slab. Palmyra jaggery, salt of all types, and cereal grains are some such items.

I need the internet all the time to do business under GST


This is another myth about the GST which we heard from many people, which is totally incorrect. But the reality is the internet would be needed only while filing a monthly return of GST.

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