GST bill covers the Goods and Services Tax and shall be the biggest indirect tax reform providing a uniform and simplified way of Indirect taxation in India. It has replaced a number of other taxes like VAT,CST,Service tax,CAD,SAD, Excise,Entry tax,purchase tax etc. GST or Goods and Services Tax - A new law,a new tax that has brought with it new challenges to face.
The basic idea for introducing GST is to convert India into a single market.This might have a positive impact on GDP of India and help to boost the Indian economy.
Dual system of GST includes :
- SGST or State GST - collected by State Government.
- CGST or Central GST - collected by Central Government.
- IGST or Integrated GST - collected by Central Government.
Positive Impact of GST :
- A unified tax system removing a bundle of indirect taxes.
- Remove the cascading effect of taxes.
- Manufacturing costs tend to be reduced,hence prices of consumer goods likely to come down.
- Due to reduced costs some products like cars,FMCG etc.will become cheaper.
- A unified tax regime will lead to less corruption which will indirectly affect the common man.
- But,this is possible only if the benefit is actually passed on to the consumers.
Negative Impact of GST :
- Services will become expensive.e.g.Telecom,banking,airline etc.
- Being a new tax,it will take some time for the people to understand its implications.
- It is easier said than done.There are always some complications attached. It is a consumption based tax,so in case of services the place where service is provided needs to be determined.
- If actual benefit is not passed to consumer and seller increases his profit margin,the prices of goods can also see a rising trend.
However,GST is a long term strategy and the positive impact shall be seen in the long run only.