How you can Reduce the Impact of GST?
13 July 2017
GST lead to increase in the tax rate of the apparel to 12% if the price exceeds by Rs.1000 per piece.
Let me give you an example:
As per GST slabs tax rate on clothes will be 12% (clothes above Rs.1000).
- Weaver sells a fabric to a tailor for Rs. 5,600 per meter. Weaver pays GST of 600. Where the selling price is 5,000 excluding GST. Total GST collected in the first transaction is 600.
- The tailor sells a readymade completed dress to a retailer for Rs.16800. The tailor pays GST of Rs.1800. After the input tax claim weaver claim tax credit of Rs.600. Input cost to tailor is 5,000 and sale price is 15,000, both excluding GST. In second transaction GST collected was Rs.1800.
- The retailer sells the readymade dress in his showroom for Rs.33600. The retailer pays GST of Rs.3600. After the input tax claim, tailor claims a tax credit of Rs.1800. Input cost to the retailer is 15,000 and sale price is 30,000, both excluding GST. In third transaction GST collected was Rs.3600.
- You purchase the dress at 33,600. No tax credit claim as you pay the entire GST Rs.6000 at 12%. The GST collected which is paid entirely by customer for Rs.33600 dress is Rs.6000
You could rent the same dress of Rs.33600 for two months with just the tax amount you pay to buy a new pair of clothes.
Even if you see the laptops, camera, desktop, projector due to GST the price is getting an increase for all this process. We hardly use Camera, projector on the daily basis. Why expense in the products that are not in everyday use. Rather than buying, renting would cost you less for these products that you use once a month. Even if you do the calculation roughly for a camera which cost is Rs.40000? If you hire it from RentSher it cost you 500/day. Even if you rent it monthly 4 days it will cost you 2000, with the same amount you buy a new camera you can rent it for the period of 20 months, that too the latest camera. Don’t you think it’s a good deal to Rent a camera rather buying it with home delivery and pickup service, and always being updated with the technology?
The Same calculation goes to more products that we tend to buy but we are not able to as due to the high cost of it. So, it's Time for all of us to rent and never set barriers for any function or plans. Get costly product for the period you want in very less price.
So from today focus on rent rather saving money to buy and setting your desire aside.