What is GST?
Goods & Services Tax Law in India is a comprehensive, multi-stage, destination-based tax that will be levied on every value addition. In simple words, GST is an indirect tax levied on the supply of goods and services. GST Law has replaced many indirect tax laws that previously existed in India. The new tax regime, the Goods and Services Tax (GST) brings massive changes in one of the largest economies of the world. The GST will change the way people conduct businesses in India as the country will become a single market with a single tax rate, irrespective of the state you conduct your business in. Barring a few exemptions, from the smallest entity on the economic food chain to multi-billion conglomerates, no one will stay untouched by the GST. The effect of the new tax regime will be proportional to the size of the entity but ultimately it will be the end user who will bear the brunt of the higher tax rate or get the benefits of lower taxes. Read on about the effect of GST on beauty products.
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Cascading effect of taxes!
Before GST, tax on tax was calculated and tax was paid by every purchaser including the final consumer. The taxation on tax is called the Cascading Effect of Taxes. Read on about the effect of GST on beauty products.
GST avoids this cascading effect as the tax is calculated only on the value add at each transfer of ownership. GST will improve the collection of taxes as well as boost the development of Indian economy by removing the indirect tax barriers between states and integrating the country through a uniform tax rate. Read on about the effect of GST on beauty products.
Cascading effect of taxes!
Just when the beauty industry was getting back on track after the demonetization announcement of 28 percent GST on cosmetics and 18 percent on services provided by salons has seen a considerable decline within the first week of its implementation. Earlier, there was a 14.5 percent tax on cosmetics. From that to 28 percent is an enormous hike. Currently, a tax of 22% including excise duty and other taxes are levied on products such as toothpaste, hair oil, and soap but after GST a tax of 18% will be imposed. Skin care products and shampoo have been put in 28% tax category while Vermilion, bindi, and mascara have been left out. As far as sanitation is considered, a tax of 12% will be levied despite the demand of making it tax-free. Read on about the effect of GST on beauty products.
Certain products were going to be tax-free under GST. But alas! That wasn’t true eventually!
The store owners are trying to sell the old products at the earlier price itself and the prices would be revised once they buy new products. But their old products are also not getting sold out. While sellers are trying to sell their old products, they say that there is a scarcity in the market because the new products haven’t been dispensed yet. The demand for cosmetics, especially compact powder, liquid foundation, lipstick, and Kajal are quite high. But most stores have old cosmetics stocked, which the customers are refusing to buy. Read on about the effect of GST on beauty products.
GST and makeup artists!
It isn’t only the beauty products that have taken a setback. Make-up artists in the city are also facing the heat due to GST. Talking about the increase in the remuneration that make-up artists are charging now. Earlier, they used to charge a 15 percent service tax. Now, even if the tax has gone up to 18 percent, it gets nullified as there are many clients who insist on cash dealing, which goes unbilled. With a tax on services going up to 18 percent and 28 percent on cosmetics, beauty salons are also struggling to maintain their customers. Read on about the effect of GST on beauty products.
Makeup artists were severely hit by GST
The tax high may not seem too steep at first. But just one service is enough to make a client feel the pinch. For instance, a woman ends up paying 54 for eyebrow threading which once cost 40, this is bound to make a client think twice about going to a salon. One cannot discount the fact that our business depends solely on the products we purchase in bulk from beauty shops. If the rates there increase, we will have no choice but to step up our prices too. Read on about the effect of GST on beauty products.
At a time when both the supplier and customer are battling the steep GST rates, online services are coming handy. Read on about the effect of GST on beauty products. Read on about the effect of GST on beauty products.
As the prices of goods and services are increasing, so does our income should. Therefore, we should plan everything accordingly and then use the goods and services. Read on about the effect of GST on beauty products.