The talk of the Nation these days is GST (Goods and Services Tax). GST have its Benefits and drawbacks. But what is GST? & Meaning of GST. We need to understand it clearly and how it will help the denizens of the country. The GST is a value added tax (VAT) proposed to be Indirect tax levy on manufacture, sale and consumption of goods as services at the national level. It will change all the indirect taxes which were levied on goods and services by the State and Central governments. GST is considered to be historical tax reform in India. It also has some demerits. Here below are the advantages of GST.
GST (Goods and Services Tax) Benefits :
- GST will reduce the number of indirect taxes and is considered to be transparent tax
- There will be no hidden taxes and the cost of doing business will be lower.
- The GST will increase the consumption of people due to decrease in the prices
- Services will be increasingly used or consumed in the production and distribution of goods.
- All the Integration of taxes under GST System would increase the taxation burden on the manufacturing and services.
- GST will be levied on the consumption based on VAT principle. This will help in removing economic distortions and ring new development in national market.
- GST is backed by the GSTN which is a fully integrated tax platform that deals with All aspects of GST
GST (Goods and Services Tax) Drawbacks:
Few of the Economists say that GST have its merits and drawbacks. But if we see the GST Drawbacks it is little then the benefits. GST would have negative impact on the real estate market. It will add up to 8 percent to the cost of new homes and reduce the demand by about 12 percent.
- Some experts says that CGST i.e Central GST, State GST are nothing but the new names for Central Excise, Service Tax, VAT and CST. There will be no major reduction in the number of tax layers.
- Some of the retail products have only 4 % tax on them and after the GST the garments and clothes will become more expensive.
- The aviation industry will also be affected. The service tax on airfares currently range from six to nine percent. With GST, the rate will surpass fifteen percent and effectively double the tax rate.
- The adoption and migration of the new GST system would involve teething troubles and learn the entire ecosystem.
The items that will be cheaper for the common man are:
- Prices of movie tickets may become cheaper in most states
- Dining in restaurants
- SUV s and luxury or premium cars
- Washing machines
GST for the common man will make the things costlier for the following products
- Residential Rent
- Renewal premium for life insurance policies
- Banking and investment management services
- Basic luxuries for a common man like WIFI and DTH services, online booking of tickets may become costlier.
- School fees
- Commuting by metro or rail may become expensive.
- Aerated drinks
- Cigarettes and tobacco products.
Taxable Person under GST:
Taxable person under GST are the persons who must have GST registration and are required to comply with all GST regulations.
What is the Basic Difference between IGST, CSGT and SGST
Under GST, both the Central and State Governments simultaneously levy taxes. The levy of IGST or CGST and SGGST would depend on the type of transaction, i.e., inter-state or intra-state.
Lastly to conclude GST benefits and Drawbacks are very much discussed among many of the citizens of India. The actual benefits will be seen after it’s implemented from 1 July 2017.