GST to make watching movies and cricket at stadium cheaper in Maharashtra
Mumbai city news: For residents of Maharashtra — among the Indian states that charge a very high entertainment tax of 45% — the GST will significantly bring down entertainment billsmumbai Updated: May 21, 2017 01:20 IST
Watching films and attending plays and cricket matches will get much cheaper once the Goods and Services Tax (GST) scheme rolls out in July.
The GST council is fixing tax rates for the common tax system. For residents of Maharashtra — among the Indian states that charge a very high entertainment tax of 45% — the GST will significantly bring down entertainment bills as the tax you pay has now been slashed to 28%, which includes convenience charges and advertisement duty.
Household items — foodgrains, soaps, medicines — are also likely to get cheaper after GST. You will pay less for cars and bikes too, as the highest tax slab fixed for them is 28%. This is much lower than the existing taxation — the rate for small vehicles is 31%, and 35-40% for heavy vehicles. The state has also urged the council to exempt drugs, dialysis equipment and cancer treatment from the 5% taxation slab.
You will, however, have to pay more for hotel stays, eating out and jewellery, as these taxes for have been increased.
Eating out will be about 10% dearer. Hotels have been put in slabs, which may lead to a rise in tariff at star hotels and AC eateries.
So far, hotels and restaurants with an annual turnover of Rs10 lakh were excluded from the tax bracket. While the GST regime has increased this limit to Rs 20 lakh, the existing composite taxation for hotel industries has been broken into various slabs. The hotels with an annual turnover of more than Rs50 lakh will come in the 5% tax bracker.
“We have suggested that the turnover limit be extended to Rs1 crore so more hotels serving the middle-class will get the benefit. Currently, hotels with a turn over up to Rs3 crore attract 5% tax, while those with a turnover of more than Rs3 crore pay 8% tax,” said finance minister Sudhir Mungantiwar.
“With the composite taxation scheme existing in the state, we currently pay a 5% VAT, but this will now increase to 18% for food and beverages, and 28% for hotels with rooms. Bills in most eateries in big cities like Mumbai will shoot up by 10%. The industry, in turn, will get a beating as the taxation on star hotels and hotels with rooms will be the highest, when compared to places like Singapore and Dubai. This will lead to loss of tourists to other countries,” said Kamlesh Barot, a former president of the Federation of Hotels and Restaurants Association of India.
The state has also requested the council to keep taxes on gold ornaments in the lower bracket.
“We have a 2% tax on gold ornaments. Much of the gem and jewellery industry is in Maharashtra and Gujarat and employ millions of labourers. Higher taxes will hit this industry. The council has proposed a 5% tax on gold ornaments, but a final decision will be taken during the meeting in the first week of June,” Mungantiwar said.
“While some of the goods will become dearer, overall taxation on household goods has drastically reduced. About 81% of the goods currently are in the taxation net ranging between 25 to 28%, and all of this will reduce to 18%,” said an official from the finance department, requesting anonymity.
The state government also expects greater revenue from stamp duty on contracts and agreements related to the films and advertisements. Many such documents are usually registered in other states with lower stamp duty to evade the higher taxation.
First Published: May 21, 2017 01:20 IST