The Group of Ministers (GoM) has reduced the GST on 20-litre water bottles, bicycles and exercise notebooks to 5%. This move is aimed at making these essential items more affordable for consumers. This GST reduction can increase demand for these products, benefiting both consumers and businesses.
Impact on Businesses Selling Essentials
For businesses dealing in water bottles, exercise notebook and bicycles, the reduced tax rate will be boosting sales as it will now lower prices for customers. However, businesses selling water bottles bicycles and exercise notebooks need to update their pricing and tax systems to accurately reflect this change in their GST Return Filing.
GST Hike on Shoes and Watches
Luxury goods like shoes priced above ₹5,000 and high-end watches will now face higher GST rates. The GoM has increased taxes on these items to generate more revenue from non-essential, high-value products. For consumers, this means higher prices on luxury items and shoes. As a result, businesses will now see reduced demand in these brands.
Challenges for Luxury Goods Sellers
Businesses selling luxury goods will need to adjust their pricing strategies to accommodate the higher GST rates. Furthermore, ensuring accurate tax calculations during GST Return Filing is crucial to avoid penalties.
Conclusion
The government’s choice to reduce GST on necessities while increasing it on luxury items creates an arrangement between affordability and revenue generation. While consumers benefit from decreased costs on everyday things, companies must manage the implications of these developments in order to stay compliant and competitive.
Moreover, If you want any other guidance relating to GST Registration, GST Return Filing or GST Updates, please feel free to talk to our business advisors at 8881-069-069.
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