admin
  • 0

Is GST good or bad for India?

  • 0
Is GST good or bad for India?
Share

1 Answer

  1. Positive impact of the GST on the common man
    -GST was launched as the unified tax system removing a bundle of indirect taxes like VAT, CST, Service tax, CAD, SAD, Excise etc.
    -GST or Goods & Services tax removes cascading effect of taxes i.e. removes the tax on tax.
    -Due to lower burden of taxes on the manufacturing sector, the manufacturing costs will be reduced. Hence, the prices of consumer goods likely to come down.
    -This will help in lowering the burden on the common man who has to spend less money to buy the same goods or servicess which were earlier more expesive.
    -The low prices further lead to an increase in the demand/consumption of goods or services. The increased demand will lead to increase in supply. Hence, this will ultimately lead to rise in the production of goods.
    -The increased production will lead to more job opportunities in the long run. But, this can happen only if consumers actually gets cheaper goods.
    From above the GST seem to be positive for Common man. Also a unified tax regime will lead to less corruption which will indirectly affect the common man. Infact experts hope to see a positive impact of GST on Indian economy in the long run.

    However, this is possible only if the actual benefit of GST is passed on to the final consumers. There are various other factors also which affect success of the GST as GST alone does not determine the final price of the goods. The anti-profiteering clause has been inserted in the GST Act to protect the interest of the consumers.

    Negative impact of the GST on the common man
    -Compliance burden: You need to deposit the GST and file returns on time. The GST returns filing is not as easy as it seems to be. You need to hire a tax professional to manage it.
    -The big businesses with sufficient staff can handle the whole process easily. But the small traders/service providers or individuals who have just started their business or service, will face greater complexity.
    -Service tax rate @ 15% is presently charged on the services. If the GST is introduced at a higher rate which is likely to be seen in the near future, the cost of services will rise. The GST shall be charged @18% on maximum services and shall reach upto 28% for few services. To simplify, all the services like telecom, banking, airline etc. will become more expensive.
    -The increased cost of services means adds to your monthly expenses.
    -Businessmen and service providers are still learning about the new laws of GST. This will increase reliance on the tax experts and professionals and further add to business expenses.
    -Proper invoicing and accounting needs to be done to ensure the better compliance. However, GST accounting software are being developed in this regard by various companies which help to a great extent.
    -If actual benefits are not passed on to the consumer and the seller increases his profit margin, the prices of goods can witness a rise in price to ultimate consumer.
    -An increase in inflation might be seen initially, thought it may come down gradually.
    The actual implications of the GST can be experienced after a certain period of time..A strict check on profiteering activities will have to be done, so that the final consumer can enjoy the real benefits of GST.

    • 0

Leave an answer

You must login to add an answer.