Economy is the condition or a state of a country in terms of the production and consumption of goods and service and supply of money. The country which has strong economy, becomes more strong than other. If we talk about India, it has the seventh largest economy in world.
Goods And Service Tax
The introduction of goods and service tax is a favorable step for growth of India by collaborating central and state taxes into a single tax. The biggest advantage of GST is the reduction in the tax burden and the introduction of GST would also promote Indian products and make them competitive in domestic as well as in international market.
GST in India
Now the question arises that what will happen when GST covers the Indian Economy. The route of the constitutional bill on GST has got the way for implementation of GST in India, because current tax structure and complex multiple taxes increase the cost of inland products or goods, and that taxes are less attractive for Indian manufacturer. GST will reduce the cost of locale goods and increase the market of indigenous goods, besides this it will promote make in India.
- GST Acts and rules finalized and in public domain.
- SGST Acts passed in several states.
- GST rates on Goods and Services announced.
- 3200 GST workshops held across the country with state VAT authorities and trade and industry chambers.
- Over 50000 central and state Tax officials trained in GST.
- 12 organizations authorized by NACEN for training members of trade and industry and other stakeholders.
- Migrations of existing taxpayers completed substantially, window for migration open again from 1st June to 15th June 2017, for those taxpayers who have not yet migrated.
GST Tax Rates
Government has finalized four different tiers of GST. The structure of GST is as
- 5%:-transport services, ac train travel, advertisement in newspaper and restaurants with 50 lakh turnover and Economy air class travel will attract 5% GST.
- 12%.GST:- The Business Class Air travel, non ac restaurants, hotel and lodges, fertilizers and work contracts like whitewash will charge 12% GST on food bill.
- 18%:- Insurance, telecom services, IT services, ac hotel serving liquor license and financial services liable for 18% GST.
- 28 %:- five star hotels, cinema, gambling and betting at race course will go 28% GST.
- In the GST all essential items are on lower rate of Cess and the higher rate is vary for luxury items like luxury cars, SUVs, business Class Air Travel etc. other products like tobacco will also attract to some additional duty. The other essential items like food and health care will be text 0, due to control on inflation.
The outcome of GST will be very favorable for Indian Economy.
- It will raise the scale of production and supply chain by making India a common market with smooth credit and removal of tax barriers.
- Removing the Indirect taxes will affect the cost of production of goods and services by decreasing the cost of local goods.
- It will promote “Make in India” by providing smooth way for doing business and removed multiple complex taxes into a single GST. It will surly reduce the cost of taxes and transaction cost.
- It is a single and predictable tax with complete transparency and it will attract foreign to invest in India by developing particular job opportunities.
- GST will helpful to maintain from unorganized to organized segment. The companies which are free from tax segment will now come in the tax net.
GST Impact – With Respect to Common Man
The GST effect the commoner and non commoner both. The productivity of India will increase through GST. And it will also cost effective for common man.
- Items like milk, fruit, vegetables, food grain and cereals
- and other daily needs would be out of the GST tax.
- Tea, coffee, sugar, and edible oil and sweets have been placed lowest of 5 %.
- The electronics products will become cheaper for common man, especially the Indian products.
- The small cars, which come under 5 lakh, will out of GST tax or become cheaper.
- The hotel and lodges with tariff under 1,000 will be out of tax.
- Watching movies in multiplex become expensive for common man.
- Five star hotel services, cinema, gambling and betting at race course etc have GST increasing effect.
- Business class air tickets and work contracts rates will increase.
- Transport services like railway and air travel includes with high rating.
- Ola, Uber cabs and restaurants with 50 lakh of below turnover would be 5% GST.
- Entertainment tax will be merged with service tax under the GST.
- Work contacts such as whitewash will be liable for GST.
Government has taken several initiatives in the last 6 months to ensure smooth rollout of GST. According to central board of excise commission GST will implement soon in India. It would be a favorable decision for common man because most of the manufactured Goods are become cheaper. Several tax barriers will be removed by GST, and transfers the Goods and Services between states. GST promote Make in India and Digital India, which is the dream of every Indian citizen, and also the Prime minister. Collaborating the central and single tax into one tax will increase the production of products. Some of the aspects would have advantage of GST, whether some of have disadvantage of this tax. Like five star services and liquor license have extra tax, that common man can’t even afford, now it will be impossible to afford it. Now just to wait and watch the proper implementation of GST in whole country, what would be the negative and positive effect? GST will be like good news for common man or it will again become a terrible condition, let’s see, what happens.