According to the pundits GST is a game changer. But the process that led to untying the GST knot was a game changer too .Prime Minister Narendra Modi led the process, taking big calls, and finance minister Arun Jaitley was the key interlocutor with several demanding stakeholders.
The GST is a dual taxation regime, where the only two components will be Central GST (CGST) and State GST (SGST). Under such nomenclature the total amount of GST for any goods or service will be distributed in both State and Central exchequers.
As and when a new reform or bill comes into force,it surely leaves its impact especially on the common man.
So how will GST affect your everyday life? Let’s find out. Finding difficulty in Tax Planning? We at moneymindz.com will make it easy for you. Just give us a missed call on 022-62116588 to explore our best Free Advisory Service. We don’t sell of any financial products. We only provide FREE financial advice so that you are not mis-guided while buying any kind of financial products.
Positive Impact of GST on the Common man:
- A unified tax system removing a bundle of indirect taxes.
- Less tax compliance.
- Removes cascading effect of taxes.
- Manufacturing costs will be reduced, hence prices of consumer goods likely to come down.
- Due to reduced costs some products like cars, FMCG etc. will become cheaper.
- Lower prices will increase demand/consumption. Increased demand will lead to increase supply.Hence, rise in production of goods.
- The increased production will lead to more job opportunities in the long run .But, this can happen only if consumers actually get cheaper goods.
- A unified tax regime will lead to less corruption which will indirectly affect the common man. ( 10 Key Tax Terms To Know )
How will it affect your incomes?
If you are in a business, GST will definitely knock your doors. You will need to be friendly with this tax. Regardless of what you do - whether you’re selling something, or making something, or providing a service - GST will be applicable to you. Following are the major impacts of GST for your business:
- Many of your customers will now insist on purchasing with an invoice, because they need the credit of GST.
- A lot of your business expenses (such as transportation, contracts etc.) will now be eligible for set-off against your output taxes.
- Compliance will be limited. Instead of dealing with a hundred tax offices, you will need to deal only with two tax departments.
However, GST is a long term strategy and the positive impact shall be seen in the long run only. This can happen if GST is introduced at a nominal rate (hope so)to reduce the overall tax burden of the final consumers.
Let us hope this “One nation, one tax” proves to be a game changer in a positive way and proves to be beneficial to the common man.
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