Long awaited and much talked about GST Bill is on the Rajya Sabha List Tomorrow.
After years of political tussle and various amendments to the original draft, government has managed to get in-principle support from almost all the important political parties of India. People in business and outside are hoping for something good to happen but they do not know the exact details.
GST is one tax replacing all the state and central indirect taxes with some exclusions:
Taxes to be submerged in GST
- CVD & SAD
- Entry Tax/Octroi/LBT
- Service Tax
- Central Sales Tax
- Value Added Tax – VAT
- Cesses & Surcharges
- State Excise Duty (Except Liquor)
- Entertainment State Tax
- Luxury tax
- Toll Tax
- Environment Tax
- Stamp Duty
- Property Tax
- Electricity Taxes
- Taxes on Liquor and Petroleum
- Export Duty
- Excise Duty on tobacco
Sounds good until now? You must be thinking that goods and services will be cheaper as there will be one tax instead of many?
You are wrong to some extent. Levy of single tax is good from administrative perspective but the same is not beneficial in terms of burden on consumer, major reason being high tax rates. Below are some listed impacts of the implementation of GST:
- Increase in rate of services due to increase in rate of taxation 🙁
- GDP Growth Rate to Increase by 0.5-1% 🙂
- Increase in Exports due to price competitiveness will help Economy 🙂
- Ease in Warehousing strategy will help Logistics Industry 🙂
- Negative impact for E-Commerce Industry 🙁
- Jammu & Kashmir will be covered under GST 😐
The list is long but the biggest advantage for businessmen is that they do not have to take care of compliances of so many state and central taxes. There will be one SGST/CGST/IGST and this will ease out the compliance burden of Industry.
What’s your opinion? Vote and Post your view on GST in comments section below.