Financial changes brought from October 1
For those who are unaware, your pocket expenses are being affected by a number of changes that have been brought in the financial sector, beginning October. From EMIs on loans to GST rates, these changes have been brought into effect since the onset of October this year, i.e. October 1. Mentioned below is a summary of the changes that you need to be aware of.
# No cashback on card payments at petrol pumps
In order to promote digital payment, a cashback offer was introduced by some state-owned oil companies more than two-and-a-half years ago. However, beginning 1st October, the bankers have discontinued 0.75 per cent cashback on fuel purchased with credit and debit cards.
# Changes in EMIs on loans
With interest rate on loans to be linked to the Reserve Bank of India's (RBI's) external benchmark, the EMI you pay will change. "It has been observed that due to various reasons, the transmission of policy rate changes to the lending rate of banks under the current marginal cost of funds based lending rate (MCLR) framework has not been satisfactory," RBI said in a statement.
The new floating rates for housing, auto, MSME sector shall be benchmarked to either RBI's repo rate, government of India's 3-month or 6-month treasury bill yielded by the Financial Benchmarks India Private Limited (FBIL) or any other benchmark market interest rate published by the FBIL, the central bank said.
# GST on diamonds reduced
Buying diamonds and other precious stones will now be easier as the GST on polished semiprecious stones now stand at 0.25 per cent (down from 3 per cent) and job work related to diamonds to attract 1.5 per cent GST (down from 5 per cent). The same on supply of machine job cut to 12 per cent from 18 per cent.
# Income Tax simplified
All communications without a Document Identification Number (DIN) to be treated as invalid, while taxmen will dispose off notices within three months from date of reply. The CBDT (Central Board of Direct Taxes) has specified that any communication issued manually under exceptional circumstances would have to be uploaded and regularised on the system portal within 15 days of its issuance. The CBDT frames policy for the I-T department.
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# New tax rules for entrepreneurs
Manufacturing companies set up after October 1 will get option to pay 15 per cent tax. For instance, a new company that sets up a capacity to manufacture 100 units of a product in the stipulated time frame and adds to it by acquiring a plant or an asset will still be eligible for benefits under the new regime, but on a pro-rata basis.
# GST on hotels reduced
GST (goods and services tax) rates for hotels with tariff of Rs 1,001 to Rs 7,500 to reduce from 18 per cent to 12 per cent and those costing Rs 7,501 and above to see reduced GST at 18 per cent.
# Caffeinated beverages get costlier
Beginning October 1, caffeinated beverages have become costlier as effective GST rates have been hiked from 28 per cent to 40 per cent (28 per cent plus an additional cess of 12 per cent).
# Organising a party becomes pocket-friendly
Businessmen associated with the industry for months had been demanding a reduction of GST, claiming the rate to be very high. With the onset of October, a cut in GST rates on outdoor catering from 18 per cent (with input tax credit) to 5 per cent has been introduced.
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