Last updated on October 23rd, 2017 at 03:45 pm
The GST is the Goods and Services Taxes that are levied by the Government. The mission of the GST is to take over all the indirect taxes and help to improve the economy of the nation. The introduction of GST led to the evolution of the Indian Taxation System. It became an eye candy in the field of marketing and business. If we think of defining what is exactly a GST mean- you may conclude with many terms either it is an indirect tax, or it is a Value-Added Tax levied by the Government on domestic products etc.
Hence, the proper definition of GST is
On 8th of September 2016, the President of India Mr. Pranab Mukherjee, gave an acknowledgment to this Bill, making an Act. Later, this GST Act was passed in Lok Sabha on 29th March 2017, and it came into an effect from 1st July 2017.
Benefits of GST
- Common Man Friendly– The single tax administration has made the expectations come true. More than 80% of the household items have got their prices fall down and they fall within the 18% tax slab. The GST has been categorized into different slots in the form of rates. These rates start from 0% to 28%.The day to day products got their taxes reduced and fall within the 18% GST rate. These slabs came into action from 1st of July 2017. A huge number of items are either tax exempted or in the 5% GST tax slab. Will provide a maximum number of benefits to the poor people. For a common man, the items that have gone cheaper includes
- Prices of the movie tickets have gone cheaper in most of the states.
- Dining in the restaurants
- Two – Wheelers
- Washing Machines etc.
- Advantages In The Trade and Industry– GST has given quite a little more benefits for the manufacturers and traders and industrial workers.
- One Tax– The overall structure for charging a GST for a state will include the subsuming of several taxes of central taxes and state taxes which enables to give one tax called instead to giving 16 taxes.
- Common Market– There will be a common market in the absence of CST and the entry tax. Presently, the goods are being sold mostly within the state so as to avoid paying CST. It is because this tax will not be credited at the time of manufacture or in the course of trading. The Good quality products that are manufactured at one end of the country will find more market in the farthest part of the country because there will be no CST as well as no Entry Tax.
- The Distinction Between the Goods and Services is abolished– There were different controversies going recently regarding the storage and the packaging of the goods and the services. But due to the introduction of the GST, this will get over.
- An invoice will get simpler– Initially, the invoices were more in a detailed version since the taxes on the Goods and Services are written separately for a single transaction. But after the introduction of GST, only one rate is written.
- No Entry Tax Levied– The India’s long distance truckers used to park 60% of the time. This led to the delay of delivering the goods and the products at the desired destination. Now due to the GST arrival, there is no entry tax levied. This is one of the biggest benefits for the movement of the goods by road transport.
- Big Central Excise Tariff is Removed– The eight- digit classifications called the Central Exercise Tariff has been replaced by one rate.
- GST Benefits To the Indian Economy– India has already taken strategic steps in order to develop more industrially, economically and financially. The introduction of the Goods and Services has transformed the economic growth of the nation. The involvement of GST also led to the elimination of the cascading effect of the taxes.
Some of the benefits of GST in the field of Indian Economy are
- Removal of various indirect taxes such as VAT, CST, Service Tax and Excise.
- The GST will bring the uniformity and also reduce the cascading consequence of these taxes by proving them the input credit tax. This will help the industry to benefit from the proposed common procedures and claim credit for the paid tax.
- The arrival of the GST will help to increase the mobilization of the resources that are available for the development of the country. This will either lead to the availability of the resources directly to the poorer states or indirectly the tax base becomes more weightless.
- This will benefit people as the prices will fall down and this will help the companies as the consumption will increase.
- The introduction of GST will lead to the corruption free taxation system. The tax is levied at the time of the product released from the manufacturing site, and after that, the retailers also pay for it.
- The introduction of GST will also create a positive impact on the State and the Central Government. This will help India to gain approx $15 million in a year. It is estimated that due to the implication of GST, it will also improve the exportation, provide more opportunities for the employment, enhancement in the economic growth and reduce the burden of the central and state Government.
- The successful implementation of the GST can attract the foreign investors about India’s increased economic growth, lesser compliance and the procedural costs in the taxation sphere and remove the complexities faced by the foreign investors who find it bit confused while investing.
According to the survey conducted, there are about 140 countries that have already implemented GST. Some of the countries include- Australia, Canada, Germany etc. The introduction of the GST can lead to creating a transparent and corruption free tax administration and can boost the Indian economy in the long run.
To read more about various taxes and GST in India. Visit this link: https://rupeenomics.com/different-taxes-india-direct-indirect-tax/