After Independence, Goods and Service Tax (GST) would be a huge and significant tax structure reforms in the country. It is implemented on July 1, 2017 and is regarded as a major taxation reform till date. GST was planned to be implemented on April 2010 but was postponed due to some political conflicts and some issues of stakeholders. The motive behind the development of GST is to subsume all sorts of indirect tax in India like Service Tax, Sales Tax, Central Excise Tax, etc. It brings transparency in the taxation system and increases GDP rate and also reduces tax theft and corruption in the country. It is designed to support the economic growth of the country as well.
GST is known to be one of the biggest tax reforms in India. This does not only impact the businesses but also the common man. The primary impact is felt by the consumers due to the change in prices of goods and services with respect to GST rates.
So, from the point of view of a common man or a consumer, the biggest advantage is the reduction in the overall burden on goods estimated around 30% before the GST implementation.
Here is an example to explain the impact of GST on the common man and the impact on pricing are listed below for references.
GST is expected to bring a better and greater transparency in the system and create a common playing field for businesses by amalgamating a host of central and local taxes. It has changed the current tax regime, from being a production-based taxation to a consumption-based system.
For a common man, the main focus is primarily on pricing of various consumer products in GST. As it is known that the GST rates are fixed based on the principle of ‘equivalence’, the prices of many products have fluctuated by either going down or have been stable, like LPG for domestic. As per tax payers, they strongly perceived that tax burden has been increased with the introduction of Goods and services Tax. It would be more better if GST is implemented after studying the Proper GST framework of other countries who all are following this regime, instead of imposing it in rush half-heartedly. It came with a mixture of positives and negatives. Some believed that relaxation must be provided to small businesses and farmers by the Government while others said that GST is the simple and transparent tax system which will help to generate the employment opportunities and effective for framing fiscal policy and it is the best substitute over all indirect taxes and it is a logical step towards a comprehensive taxation reforms.
On a whole, GST is somewhere a great initiative which is going to benefit the mankind in some or the other way, but on the other hand, it might not result in a great success and does not prove to be beneficiary for the underprivileged and people with low wages such as daily workers and farmers due to extensive variation in the prices of commodities.
BBA 5TH SEMESTER
DIVISION B-1ST SHIFT