The GST is a comprehensive indirect tax which is going to be levied on manufacture, sale and consumption of goods and services. The Central Government has brought this act. It will replace all the indirect taxes which are levied from all the points, manufacturing to consumption. GST is considered a game changer and is being implemented to make the life of people easier. The GST not only helps end consumer but is also beneficial to startups, entrepreneurs and companies. However, it has demerits as well as GST filing might become complex. We look at both both advantages and disadvantages of this comprehensive tax.
- GST is a transparent tax and will bring down the number of indirect taxes. Hence, no multiplicity
- GST will not act as a cost to registered retailers therefore implying that there will be no hidden taxes. Hence, the cost of doing business will be lower.
- Benefit would trickle down to the people as prices will come down which in turn will help companies as consumption will increase.
- At present division of transaction values into value of goods and services is done for taxation, which leads to greater costs and also enhance complications.
- In the GST system, all the taxes are integrated and hence, the taxation burden would be split equitably between manufacturing and services.
- GST will be levied only at the final destination, at the point of consumption based on VAT and not at various points (from manufacturing to retail outlets). Thus, removing economic distortions and will help in bringing development of a common national market.
- GST uses technology like GSTN, which is a fully integrated tax platform that can deal with all aspects of GST.
- GST would impact negatively on the real estate market. According to reports, it could add up to 8 % to the cost of new homes and thereby, would reduce demand by 12 %.
- Some retail products have only four percent tax on them. After GST, these products would become expensive
- The aviation industry would be affected as the new structure is not in their favor and taxes under GST would be 18%
- Adoption of the GST would involve teething troubles and learning for the entire ecosystem
Items that would become Cheaper
The following things/items are going to become cheaper under GST for the common man:
- Dining in Non AC restaurants
- Two Wheeler
- Electronics- TV, Mobile, Washing Machine
Items that are going to get costlier
The following things/items are going to become costlier under GST for the common man:
- Renewal premium for life insurance policies
- Banking services
- Residential rent
- Health care
- Commuting by metro or rail may become expensive.
- Mobile Bills
For more information on GST registration , filing and help for the same, please contact us.