Let’s first get a quick introduction to GST. GST stands for Goods and Services Tax. It is an indirect tax and a single tax provision as it eliminates all the other taxes such as purchase tax, service tax, excise duty, etc. and it is paid for by every citizen of the country. Since there is only one tax on every commodity, it can not be manipulated. The GST has impacted every middle class as well as the lower-middle-class person at some scale. If you are curious to know what is GST in more detail visit here.
The GST have various impacts on the common man. It may prove to be a boon or bane depending upon different circumstances. Here are a few impacts, negative as well as positive, that will be caused by the taxation policy.
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Positive impacts of GST-
- It removes various other taxes such as VAT, CAD, SAD, etc. as well as the cascading effect of taxes.
- The FMCG and cars industry has lower manufacturing prices and thus will be cheaper than usual.
- Since there is only one tax now the cost will be lower and thus the demand will be increased.
- GST will take control of the black money generated from the traders mostly since they use the invalid billing system.
- GST decreases the manufacturing costs of the products which will make the consumer goods cheaper.
- Due to the lower prices of products, the demand for the goods will increase in the society and this consumption will be at a rise.
- More consumption means more supply which will lead to an increase in the production of goods.
- If the production of consumer goods continues to be on the rise, more job opportunities will be created in society.
- The single tax system will be very hard to manipulate and thus will help in reducing corruption in society.
Negative impacts of GST-
- The common man has to appoint a tax professional in order to file a GST return.
- The process is easier for big brands and traders whereas it is very difficult for small traders.
- Services like banking, telecommunication, and airlines will be increased since the GST will be fixed at a higher percentage than the usual service tax.
- The higher cost will lead to an increase in the expenses of an individual.
- Since the process of filing tax is a new concept, the need for a professional tax expert is an extra expense.
- There are chances that the seller might increase his profit margin which will lead to an increase in the sales price of the goods.
- If the common has to receive the exact benefits of the GST, the officials will have to strictly check the ongoing activities of a business.
Impact of GST on regular expenses-
- Items like mayonnaise, refined sugar, condensed milk, pasta, diabetic food, etc. will shift from 18% to 12%.
- There will be 12% GST on electric vehicles.
- Earlier people who used to live in rented houses had to pay service tax. Now they will only have to pay GST.
- Garments above Rs.1,000 will have 12% GST.
- A taxi ride above Rs.100 will have 5% GST.
If you are looking to find information on GST advantages and disadvantages specific to your business or needs, you can go here for more information.