GST India – GST Benefits and Impact on Indian Economy

GST India – GST Benefits and Impact on Indian Economy
December 27, 2019 4 Comments Business, Finance, International Priya Saha

Notorious for its complex tax system. For dissimilar businesses, including startups, it becomes improbable to navigate through various direct and indirect taxes. Permanent adjustments to taxes like Service Tax are performing things even worst. But now, many things are set to change with new Goods and service tax – commonly known as GST.

Let us know what GST is, how it is different from other taxes, GST applicability, GST rates, its impact on your business, and the latest updates about the GST bill. To make things easy to learn, I will start with a general example.

Dr. Anumol is a businessman who wants to start a business. For this, he needs various raw materials that have to be imported from Germany and will need to be brought to Delhi– where he has his factory – by road through multiple states. Once he becomes down on the method of calculating his costs, he is a little troubled.

First, he requires to pay a system’s duty for importing the supplies on top of the shipping charges, This is fine, but there are a lot of other taxes that he seems to be unable to comprehend. Also, he obtains out that when he has his ultimate product ready, he will have paid the Central and State Governments at least ten different taxes, not all of which are exclusive of each other. On diving deeper, he finds many cases where the government also taxes a tax.

What are the challenges in the implementation?

India is utilizing a dual GST, specifically the Central GST (CGST) and State GST (SGST). The main hurdle in the implementation will be coordination among different states. The Centre, furthermore States will have to come to a consensus on the uniform GST rates, the inter-state transaction of goods and services, infrastructural requirements to implement the new tax reform, all of which need to be worked upon for the smooth transition into GST pattern.

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Advantages of implementing GST

The introduction of GST is considered to be a significant step in the reform of indirect taxation in India. Amalgamating diverse Central and State taxes into a single tax would help mitigate the double taxation, leading to a common national market. From an individual consumer’s position of composition, the advantage would be in phases of a reduction in the overall tax burden on goods, which is currently estimated at 25%-30%.

How will GST be a remedy?

The remedy to the above scenario of multiple taxes and its cascading effect, which is a burden on the common man, is GST. The framework of the proposal has dual GST, which means it will have a federal structure. GST will produce three manners of taxes, namely Central, State, and one called integrated GST, that will help to tackle inter-state transactions. Following the contemporary GST tax reform, all forms of supply of goods and services like transfer, sell, barter, exchange, and rental will have a CGST and SGST.

The Goods and Services Tax promises to relieve this problem, among several others. It is being recognized because of the game-changer for India’s economy and is being labeled as the most significant change in the Constitution since India’s independence. The Goods and Services tax or regularly pointed to as the GST will replace the indirect taxes levied by the Central and State Governments and provide for a single and streamlined process. It performs India obtaining a unified market to business owners and also directs at bringing a lot of black money back into the mainstream economy. The tax preference be implemented at each step of value creation.

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About The Author
Priya Saha I am content writer at LoogleBiz -A Large Local Business Directory with over 5 years' experience in creating high-quality content for a range of clients. Writing clear marketing copy to awareness about products/services, Preparing well-structured drafts using Content Management Systems, Researching industry-related topics (combining online sources, interviews and studies), include conducting thorough research on industry-related topics, generating ideas for new content types and proofreading articles before publication. #Some qualities that I have - *Excellent command over English language. *Basic analytical skills. *An eye for details. *Ability to meet deadlines. *Ability to develop innovative and engaging content. *Being able to deliver under deadlines. *Excellent writing and editing skills in English *Good command over Microsoft Office tools like Word doc, Powerpoint etc.
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