The term ‘GST’ sounds scary to many while some feel that the new tax regime is a great welcome from the previous complicated tax collection system. The one reason GST scares many is that they don’t clearly understand its actual impact on different business categories. They can’t be blamed too as much contradictory information keep surfacing thus adding to the confusion.
For online shoppers and ecommerce stores, the GST conveys certain messages which are really not comforting. The general perception right now is that online shopping turns expensive in the Goods and Service Tax regime. Is it really so? If yes, then how can you save money while enjoying the facilities and convenience of e-shopping? Continue reading to know how.
Tax Slabs on Different Product Categories
The tax rate varies depending on specific products and services. That way it might not be possible to put similar products of a particular category in a single tax bracket. Still here’s a tax break up which would help clear the ongoing confusion to a certain extent:-
- 18% tax on items like computers, printers, speakers, monitors, camera, CCTV, Optical Fibre;
- 5-18% tax on footwear, depending on prices; 12-18% tax on branded garments and apparel above Rs.1000;
- 0-18% tax on food items, of which packaged items, flavored products, mixed condiments turn most expensive whereas fresh fruits, vegetables, pulses, bread and milk get cheaper;
- 0-28% tax on personal care products, the most expensive being deodorants, shaving creams, hair clippers, shampoo, hair dye, sunscreen, etc;
- 28% tax on consumer electronics and durables like LED TV, Refrigerator, Washing machines;
- 12% tax on mobile phones and Smartphone;
- 12% tax on electric motor vehicles in the two and three wheeler categories; small cars and luxury ones to draw 28% tax post GST;
GST Impact on Online Shopping and Shipping
A marginal rise in online shopping expenses is expected as all the leading e-commerce companies are instructed to collect 1% tax for online transactions which were exempted from tax before the GST regime. However, according to recent news, this clause has been deferred by the Government as of now.
As the Goods and Service Tax removes the hurdle of completing separate paperwork for individual State, this has resulted in faster processing and delivery of the order. For instance, suppose a buyer from Delhi wants to order books and apparel from a merchant store based in Bangalore. Before GST each online seller needed to file separate bills for the purpose of logistics, Entry Tax and more. Now that the hurdle has been removed this means the instant an order is placed the shipping can be arranged immediately. There will be no levying of entry taxes on inward movement of the good. Sounds great, isn’t it!
The GST Impact on Online Discount and Freebies
Are you addicted to e-shopping that comes with lots of free offers and discounts? Then there is some bad news for you as well as good news too! Let’s start with the bad news part. With the change in tax structure post GST, every offer attracts additional tax. The tax is imposed on the purchase price. This means whenever an e-commerce company buys an item from the seller the tax is calculated on that purchase price. This financial burden makes it difficult for most ecommerce firms to offer discounts and freebies to their clients. The good news is that top e-commerce firms have found way out to reward their customers under GST as well.
Top Ecommerce Stores Can Still Help Save Money On Online Shopping
There are top ecommerce stores like Amazon, Flipkart or eBay that are still in a position to offer cashback and coupons to help you save money on online shopping. Since the Government hasn’t clearly declared its policies and rules for top e-commerce players that put Amazon, eBay, Flipkart and other top stores in an advantageous position. You can still grab Amazon coupons code or Flipkart coupons code from top coupon sites like PaisaCube and save a good deal of money on each purchase.
The GST Brings In Fresh Wave Of Sales And Cashback Offers
Some feel that the Diwali has come a few months early this year as the GST triggers a fresh wave of discounts and cashback offers. All leading brands are now in a race to lure customers with a unique money-back offers in different forms. Products which are otherwise expensive can be purchased at amazing discounts, ranging between 5 to 70%! When you do the purchase through PaisaCube you can avail additional Amazon cashback offers of around 8%, Flipkart cashback offers of 5-8%, eBay cashback offers of 7-9% or fixed money back on costly items like laptop, mobiles, tablets, cameras, clothes, household electronics and more.
There are opportunities to explore provided you know the right online shopping tricks. Try PaisaCube and reap the GST benefits the smartest way!