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Do you plan to exchange your existing mobile to buy a new one at a discounted rate? Do it soon, because once GST is implemented, chances are that you may have to pay more taxes on exchange offers.
Exchange offers on mobiles, televisions and refrigerators are going to attract a goods and services tax (GST) on the original price of the product and the reduction in the newer product will not be considered, reports Mint.
Currently, VAT is only payable on the cash that is paid.
According to an example mentioned in the draft rules, "Where a new phone is supplied for Rs 20,000 along with the exchange of an old phone and if the price of the new phone without exchange is Rs 24,000, the open market value of the new phone is Rs 24,000."
This can affect the electronics and the consumer durables space, especially the items on which you would frequently see exchange offers.
The government had on Sunday created rules regarding the new indirect regime to give more shape its various facets like the transition to GST and input tax credit.
This will help make the industry more ready for the GST and will give stakeholders ample time to respond before its expected July launch.
The only thing that remains now is allotting products into the four tax slabs.
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