A single tax body removing a bundle of secondary taxes like VAT, CST, Service tax obligation etc. A streamlined tax policy as compared to previously tax structure.However, its certainly not as easy as this seems to be actually, Check drawbacks below to get even more information.
Removes cascading effect of taxes i.e. removes tax on tax.Due to lower concern of taxes on the manufacturing sector, the production expenses will be decreased, hence prices of consumer goods likely to go low.
Owed to lowered expenses some products like cars, FMCG etc.will become cheaper.This will assist in reducing the concern on the common guy i.e.you will get to lose less amount of money to buy the exact same items which were earlier costly.
The cheap rates will further top to a boost in the demand/consumption of goods.Increased demand will certainly lead to increase supply.Hence, this will eventually lead to rise in the production of products.
The increased production will definitely top to more job opportunities in the long run.But, this can happen only if consumers actually get cheaper goods.It will certainly suppress flow of black money.This can happen only if the "kacha bill" unit, normally followed by traders and store owners is put to inspect.
A specific tax regime will top to less corruption which will indirectly influence the common individual.
Most importantly, experts hope to view a positive impact of GST on Indian economy in the long stretch.
But, this particular is possible only if the real advantage of GST is passed on to the ultimate consumers.There are different other factors also like the vendors revenue margin that identify the final rate of goods.GST alone does not identify the final price of goods.The anti-profiteering clause has been inserted in the GST Act to safeguard the interest of the consumers.
For a detailed analysis, here are some good publications on GST or Goods and Services tax that might help you as a beginner in understanding GST in a simple manner. You can hit on the pictures and get information on the GST books if called for.
Negative Effect of GST on the Typical man or Disadvantages of GST:
The first and the primary point of concern: All small traders and company providers dealing in inter state source of goods or services need to get registered, pay GST and file GST returns also regardless of the sales/income they produce (no matter if high or low).
The variety of GST returns that you need to file i.e. you possess to file 3 monthly returns, this totals to total of (3 * 12) 36 returns plus 1 annual return.Filing 37 returns in a year ... Moreover, this applies to one state, if you function in different states, you require to register in each state separately and file the respective returns. Isn't that too much for a small trader or service provider or an online service provider who has just started working?
Although big companies possessing sufficient staff can deal with the whole procedure very easily.But, what about small traders/service providers or people who feature just started their company or service, isn't that getting a bit complex for them? A small exemption in this regard could have been a huge sigh of alleviation for such people! Truly hope to see some leisure to it in the upcoming days. Do allotment your opinion on the same in the comment section below and if you liked our analysis, don't neglect to talk about it with your friends!
Service tax rate @ 15% is currently charged on the services. So, if GST is actually introduced at a much higher rate which is most likely to be actually seen in the near future, the expense of services will rise. GST shall be billed @ 18% on optimum services and shall reach out to upto 28% for few solutions. In simple words, all the solutions such as telecom, banking, airline etc. will end up being more highly-priced.
Increased cost of solutions implies, a bring in on to your monthly costs.
You will possess to reschedule your budget plans to bear the additional services cost.Businessmen and service providers are still learning about the new regulations. This will enhance reliance on tax experts and professionals and additional add to your business expenses.
Being a new tax, it will take some moment for the people to understand it completely.Its actual implications can be seen after a specific period of time.
It is easier stated than done.There are always a few complications connected. It is an usage based tax, so in case of solutions the place in which service is offered needs to be determined.
Proper invoicing and bookkeeping needs to be done to ensure better compliance.However, GST Accounting Software are being actually established in this regard by various business.
If actual benefit is not successfully pass to the customer and the seller increases his profit margin, the prices of goods can likewise see an increasing trend.
An increase in rising cost of living might be seen initially that may happen down gradually.
A strict check on profiteering endeavors will have to be done, so that the final customer can enjoy the real advantages of GST.
Although, a large number of policemans are being trained and a systematic IT software is being established for the successful implementation of GST. But, it will take some time for the people including the manufacturers, the wholesalers, the sellers or the final customers to understand the whole process and apply it appropriately.
GST instruction and Programs are being offered by the Government, different institutions and business to educate the people all around.
However, GST or Goods and Services tax obligation is a long term strategy prepared by the Government and its positive impact shall be seen in the long run only.The rates of GST and how effectively GST is introduced in all the States and at the Centre also plays a crucial role in deciding the actual impact of GST on the most common man.
A well designed GST Policy can bring a qualitative change in the tax body of India.A huge IT Software has been developed for the effective implementation of GST to bring things online.Revenue authorities are also being actually trained for turning GST into a reality.But, the actual performance and end results could be visualised as soon as GST is executed.
Speaking about the different markets, a few may earn, some might lose.But, ultimately we will certainly have to get put to use to this new tax, which is proceeding to be a site change having a great impact on India and its taxation unit.
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