Before I pen down this article, we all are familiar with GST. What is GST?
GST or Goods and Services Tax is an indirect tax that is categorized in five slabs. (0%, 5%, 12%, 18%, 28%). The tax is applied to all goods and services, except alcohol and electricity. It replaces the clutter of all taxes such as vat, service tax, CST, excise duty, sales tax, purchase tax and many more.
what does it mean to a common man? It is a hot question for debate!!!
On July 8, 2017, the GST bill was passed facing many hurdles before implementation. The central government of India (Modi government) implements this bill in all states of India. Our former finance minister brought reforms in various indirect taxes. This tax is also known for “One Nation One Tax”. GST brought many positive changes in Consumers or Common man lives. The overall impact of GST is listed below:
Merits of GST- Merits of GST are listed and discussed below:
- Uniform tax- Before GST was introduced, various indirect taxes like Vat (value-added services), services tax, and so on taxes were levied on all goods and services. Cluttering of taxes resulting in multiple procedures, acts, and rules which is quite difficult to maintain. Taxes were imposed by different states had different tax slabs and rates. But GST was implemented having uniform tax, easy administration, computerized administration procedures.
- E-bill system– taxpayers get benefits to pay taxes digitally with the help of an electronic bill system. Tax can be deposited through internet banking, credit cards, debit cards, Paytm, UPI, etc.
- Self-regulating system-it is more convenient for small taxpayers having turnovers of 1 crore to pay quarterly returns by sending messages from your mobile phones.
- Redemption taxes for small taxpayers– small taxpayers having turnovers of 20 lacs are exempted from tax and rebate in taxes having turnovers of 50 lacs.
- Decrease corruption rate– with the introduction of the electronic bill system, the rate of corruption is declined. manufacturers and sellers are instructed to maintain bill books (sales bill), this reduces the frauds done by taxpayers to government. This decreases the black money in India.
- Ease of doing business– Simple tax regime having a few amendments and simple tax-paying system increases ease of doing business. India is well known for its startups nowadays. The idea of job creation rather than jobs seeking to eradicate unemployment and boosting our Indian economy.
- Production increased- unique tax helps the manufacturers to increase their production. production of goods is increased after implementing GST, due to the reduction of heavy taxes levied manufacturers sector.
- Overcome unemployment-As the production of goods is increased in industries brings more employment opportunities in various sectors.
- Boosting economy– gross domestic production is increased after implementing one nation tax. GDP growth is increased from 6% to 7.2% during 2017-2018.
- Reduction in prices-competitors like manufacturers and businessmen reduce their prices due to increasing demand for mass consumption via foods, grains, consumable items that comes under tax slabs having 0%.
- Benefits to consumers- Increasing competition between manufacturers and businesses directly affected the consumers. Consumers provide goods at minimum price. Hence the
GST exemption- Alcohol (liquor, and tobacco products), petroleum products and electricity are exempted from GST tax slabs.