Some Benefits Of GST For Aam Aadmi
As the four GST bills were passed yesterday in the Lok Sabha after a debate session of almost 7 hours. We all should know the benefits after the implementation of the Goods & Service Tax.
Following are the major benefits
1. Life will get sorted
We all used to pay 17 indirect taxes. But after the implementation of GST compliance cost will fall.
2. Investment Boost
For many capital goods, input tax credit is not available. Full input tax credit under GST will mean a 12-14% drop in the cost of capital goods. Expected: A 6% rise in capital goods investment, 2% overall.
3. Logistics, inventory cost will fall
Checking at the state border slow the movement of trucks.
4. Common market for all
It is fragmented into state lines, will push costs 20-30%
5. Revenue will boost up
Input tax credit will encourage suppliers to pay taxes. there will be dual oversight, the number of tax exemption will decline.
6. Make in India
GST addresses cascading of taxes, inter-state tax, high logistics cost and fragmented markets. Increased protection for imports.
7. Free online
State restrictions and levies have complicated ecommerce. Some sellers do not even ship to states. All this will end with GST.
The actual regime may not be the best possible - Too many exemptions could undermine the levy - Goods like petroleum, alcohol and tobacco may be excluded - A high tax rate would stoke inflation as service taxes will rise more steeply - Fiscal stress if expected collection efficiency doesn't materialize early.
GST will be the biggest reform in the taxation since independence. The good and service tax will replace the dozens of levies taxes which were fracturing the world’s fastest growing economy.