“We are aligning ourselves with new taxation regime…. GST is a new ‘moti’ (bead) in this ‘maala’ (necklace).”
When Prime Minister, Shri Narendra Modi made the speech and called Goods and Services Tax a step towards transformation, it filled one and all with a ray of hope. Though, the common man has been affected by the present heavy taxation policies, it is hoped that the effect of GST would benefit him as well through GST implementation in India. But before we move ahead, it is important to know why exactly there has been so much deliberation over GST. For the common man, it is important to understand the key benefits of GST Bill and learn about the ways in which GST is going to affect him.
GST, the biggest tax reform that India has seen since its independence, is paving its way with several benefits. We will discuss about GST effects and its positive impact on the aam janta.
- Ease in Compliance
GST is going to abolish 17 indirect taxes levies and consolidate them all into a flat rate which will bring down the compliance cost. The overall tax structure will be made simple and lean.
- Boost to ‘Make In India’
Manufacturers will get a competitive edge since GST will do away with cascading effect (tax on tax). Besides, the issue of fragmented markets that push up the cost by 20% to 30% along with inter-state tax is going to be addressed too.
- Opportunities For All
Presently, production of supplies takes place within the state because of inter-state tax levy. GST will push India towards One Nation, One Tax which will integrate the country into one national market.
- Cost Effective Goods
Lower logistics and tax costs mean cheaper goods. Simple!
- Ease to E-commerce
Many e-commerce sellers do not ferry goods to particular states due to state restrictions and levies. With GST, online shopaholics are sure get a little more relief!
- Regularisation of Unorganised Sector
Large industries like construction and textile are highly unorganised. GST provides for availing input tax credit only when the supplier has accepted the amount. This would lead to better accountability and regulation.
- Effect on GDP
GST will be a key revolution in pushing GDP by 0.9 to 1.7% up the ladder by generating higher revenue for the government.
- Wider Tax Base
More entities will come under the tax system and this would widen the tax base. Consequently, it would lead to better collection of revenues.
- Investment Boost
There will be more investment avenues as the market will witness many more players, giving access to more investment vehicles.
GST implementation in India is indeed, a historic development. With the aforementioned advantages and many more, India is sure to rise to a bright future!