On current tax system in majority of services we pay 15% tax which include service tax 14%, Swatch Bharat 0.5% and Krishi Kalyan Cess 0.5%. As per the new four tier GST system majority of the services are falling in 18% tax category. Let’s discuss the impact of GST on our daily used services
Air Travel: if you are planning to fly on economy then you will get the cheaper tickets from tomorrow as the current tax rate of 6% will be replaced by tax rate of 5%. And for the business class book your ticket before midnight as the current tax rate of 9% will be replaced by tax rate of 12%.
Hotel Stay: Your vacation or trips will going to be little effective if you are going to book your stay in mid tier Hotel as GST replace the service tax and local tax (luxury tax) which now get segregated on the basis of Room Tariff:
- Room Tariff between Rs.1000 – 2500 : 12% tax
- Room Tariff between Rs.2500 – 7500 : 18% tax
- Room Tariff between above Rs. 7500 : 28% tax
Taxi / Cab: your ride to radio taxi or cab will going to be cheaper as new GST rate are lower than the current service tax rates.
Insurance Premium: Buying insurance will going to be little expensive after GST implementation from tomorrow, it has impact on your term plans, motor insurance, health plan and endowment plan, below is the comparison of taxes on insurance before and after GST implementation
| Life Insurance | Applicability | Before GST | After GST |
| Term Insurance | On entire Premium | 15% | 18% |
| Endowment Insurance | On 25% of first Year Premium | 3.75% | 4.50% |
| On 12.5% of renewal Premium | 1.88% | 2.25% | |
| Ulip Insurance | On first year Premium | 3.50% | 4.50% |
| On renewal Premium | 1.75% | 2.25% | |
| Health Insurance | Applicability | Before GST | After GST |
| Health Insurance | On entire Premium | 15% | 18% |
| Motor Insurance | Applicability | Before GST | After GST |
| Motor Insurance | On entire Premium | 15% | 18% |
For example, if you are paying annual premium of Rs 25,000, GST will result in a tax burden of Rs 4,500, compared to Rs 3,750 currently.
Movie/Cinema Tickets: Watching moving in a cinema hall will going to be expensive or cheaper is vary from state to state as in current tax system every state have their own entertainment tax percentage like in Jhakhand it is 110%, in Uttar Pradesh it is 60% so from tomorrow onwards you will pay only 28% so the movie tickets will going to cheaper but In state like Assam, Punjab, Himachal Pradesh or Uttarakhand you have to pay more for movie tickets as these state levy zero.
| Movie Ticket Prices | Tax After GST |
| Rs.100 or less | fixed a tax rate of 18% |
| Above Rs.100 | fixed a tax rate of 28% |
Mobile and Broadband: your mobile and broadband bill will increase by 3% after the GST enactment as telecom industry have been put under the 18% tax slab under new tax regime compared to the 15% tax levied in the old tax system.
Restaurants and Eating outs: Meals at restaurant will going to be cheaper as it is falls into the GST rate slab of 12% and 18% which is lower than the current tax applied on restaurants food bills. In addition to this restaurant are also eligible for credits of input taxes.
