After much hype and anxiety, GST has finally arrived and this has left the majority of the Population Clueless and confused while some mainly the working class have welcomed the change whereas a few small traders have come out in the open to express their dissent and have staged protests against GST. Let us examine what exactly GST holds for the nation.
GST or goods and service tax is a direct tax which aims to eliminate all indirect taxes merged into single tax.
It is believed that the prices of goods will be reduced and will change the economy of the nation.
GST will also reduce the burden of the state and central government and result in a corruption free taxation system.
It will also introduce 5 major slabs which are 0%, 5%, 12%, 18% and 28% and it doesn’t end here.
Returns need to be filed 3 times a month that is a total of 36 returns per year for per state.
GST aims to reduce the cascading effect of taxes where all input credit will bring down the tax burden.
The taxes paid under excise duty cannot be claimed against service tax dues and vice versa.
The greatest advantage is that the taxes for all state will remain the same no state can fix their own ratio
It will also introduce a greater number of Taxpayers and remove all other auxiliary taxes.
Excise duty, VAT, Octroi, Entry Tax, Luxury Tax etc and have a uniform indirect tax GST across the country.
Where and how is it levied or applied
GST is applied to all goods and services particularly for human consumption except for alcohol.
Goods include all kinds of movable property whereas service includes anything other than goods excluding money and securities.
Exports would be zero rated meaning that the taxes paid on inputs would be refunded.
GST Network is backed and applicable by the Information Technology Infrastructure
Who will pay GST and how much still a mystery
All person or company who has a turnover of over 20 lacs in a financial year is subject to GST
The turnover depends on the supplies of the agent, exempt supply, exports and inter-state stock transfers.
It is a dual tax that is levied under a single invoice of the same value.
There will be no hidden taxes and the cost of doing business will be lower that will make Export being more competitive.
Benefits for people as the cost will be reduced and beneficial for companies and consumption will increase.
Disadvantage of Introduction GST
Economic experts predict the negative effect on the real estate market also builders and investors.
GST will eventually increase the cost of construction which will reduce the demand in the long run.
After Applying GST clothes and garments could become more expensive.
With GST, the airfare rate will surpass 15 percent and effectively double the tax rate on air tickets.
Commuting by metro or rail may become expensive
Common Man- Items Expected to Get Costlier
Finally, GST will come into practice and will be applicable from 1 July 2017.Since most of the traders are uneducated and while many areas which do not simple Wi-fi Facilities will the worst hit by the big blow GST. The only benefit of GST is that misuse of input credit will come down, which is on the major scale and revenue collection will increase surprisingly.