Wednesday, July 28, 2021
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GST will transform the manner in which business operates

Going by the saying, GST is a much-needed economic reform which should eventually expand India’s narrow tax base and increase government revenues. Remember, every coin has two sides and GST is no exception. It will have its fair share of chaos in the coming months. There could be protests across the country over tax rates and compliance burdens and it could affect the smooth functioning of the economy. While GST will impact businesses and industries in a big way, it won’t directly affect the salaried class and self-employed personnel. Since GST is an indirect tax, it does not change the way citizens pay their personal taxes.

The country has moved to a new indirect tax regime as GST has subsumed nearly a dozen of central and state taxes. The biggest advantage for consumers will be decrease in overall tax burden on goods. Relief will be offered to business class as they need not pay multiple taxes and will shift to an easier tax regime with fewer rates and exemptions. For Indian economy, GST is being touted as a potential “game-changer”. It will definitely transform the manner in which business functions. Thus once can say that GST is a major positive disruption, leading to more transparency and will improve ease of doing as more foreign investments will come to India.

A pragmatic approach by the NDA government saw the implementation of the Goods and Services Tax (GST) coming to force from July 1.  Opposition, which includes Congress lend a helping hand to pass the bill in both the floors of the house preferred to skip the GST rollout function. It is notable that GST has been fixed for more than 1200 categories of goods and services consumed in the country with varying rates as per the commodity and particular product. After burning the mid-night oil the NDA government had a whip hand to make it a big one under Modi’s regime.

The ultimate goal of the government should be to move to a single or dual rate good and service tax structure and it is a step in the right direction. As there is no constitutional guarantee of reimbursing transitional losses, the phenomenal change fail to address the state’s insecurities. It will be a difficult task to keep GST rate structure close to possible old system and hence there may be initial hi-cups and confusion. GST would apply to all goods other than crude petroleum, motor spirit, diesel, aviation turbine fuel and natural gas.

Despite paying half of the amount in taxes, the government has failed to offer better health care and education facilities to all. The government should keep 18% as the highest tax bracket or else it will decrease the paying capacity and hammers the growth of an individual. The cost of various products and services are likely to be increased.

(The views expressed by the author in the article are his/her own.)

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