Shifting To Your New Home? Here Is How GST Will Make The Transition Costlier

Buying property would most certainly become simpler and cheaper under the Goods and Services Tax (GST) regime. Simple because as a homebuyer, you will not have to find out about the rates of so many taxes — service tax, value-added tax, excise duty, customs duty, entry tax, etc. When compared to the 18 per cent rate under GST, real estate transactions involved tax payments of up to 25 per cent, owing to the existence of a multitude of levies. Because of input tax credit facility, developers will only be paying 12 per cent GST that would further lessen the tax amount. However, the same cannot be said about setting up your new home. In case you have already bought a house and are planning to shift soon, there are many ways in which GST would raise your expenses.

Maintenance charges to go up

Let's start with maintenance charges. Before July 1, an apartment owner paid 15.55 per cent as tax on maintenance charges. Under GST, this owner would be taxed at an 18 per cent rate, a difference of 2.5 per cent. In case you pay over Rs 5,000 as maintenance charge to your apartment society, get ready to shell out more for paying tax. Also, housing societies which annually earn over Rs 20 lakh from apartment owners as maintenance charges will be taxed at the same rate. In any of the two cases, your burden is likely to increase. Take note that maintenance charges do not include utility bills such as electricity and water charges or property tax and stamp duty.

Pay more for decking up your home

Now, in case you are planning to hire the services of an interior decorator to beautify your house, you will be paying an additional three percent tax under GST. One paid a service tax of 15 per cent on interior decorator services earlier. Under GST, the rate is kept at 18 per cent. However, rates for carpets and LED lights have been reduced substantially. For LED lights and lamps, the tax would be reduced from the existing 17.5 per cent to 12 per cent. For carpets, the same rate would be applicable, a substantial reduction from the earlier 25 per cent.

Pay more for TV, AC

In case you have to buy a new television, a new refrigerator, a new microwave, a dishwasher and a new washing machine for your new home, you may have to pay double the price that you paid before July 1, the day on which the GST regime came into effect. Manufacturers of these items will have to pay effective four per cent more in taxes now.

"We have not yet decided the price hikes under the GST. We are also calculating the effect of higher prices of steel, copper and plastic. Hopefully, the increase will be spread over the coming months," a Business Standard report quoted Whirlpool India Vice-President Kapil Agarwal as saying. Fans, air coolers and water heaters, on the other hand, would cost you less now.

The additional burden on your kitchen

This is for you, the woman of the house. You will be paying more to have an ample supply of your favourite beverages, tea, coffee and aerated beverages. In case you like your food hot and spicy, it is also going to cost your more. The new tax rate on tea, coffee and masalas will be five percent under GST. The rates varied between three and nine per cent earlier. Aerated beverages would be taxed at 28 per cent under GST.

Pay more to stay connected

Wait, you will also be paying more for enjoying uninterrupted DTH services, internet and Wi-Fi connectivity. Because the new tax regime would need you to be more tech savvy than ever, you will have to ensure you do have an internet or a Wi-Fi connection.

Ready to transact? Pay more for that too

To buy your household items or to avail of the services, you will be using plastic money. This, too, is going to cost you more now. For all your banking needs, you will be paying a higher amount to avail of the services. This includes ATM withdrawals, too. In case you are more of an online shopper, be ready to pay extra. Till July 1, e-tailers did not pay any tax to the government. Now, they will be paying a standard tax of one per cent. This may translate into a higher outgo for the shopper.