Introduced by the Constitution’s 122nd Amendment Act 2017, Goods and Services Tax (GST) to be imposed by the Government of India is to replace other taxes levied at Central and State levels.  It is expected to be effective from July 1st 207, and subsequently, it will affect the common man’s finances in many ways.

Some taxes that would be replaced by GST are taxes on the interstate transport of goods, services tax, surcharges, central excise duty, state-level value added tax, additional customs duty, Octroi etc. Also, lottery tax, entertainment tax entry tax, and advertisement tax would be combined together under GST.

GST is considered to be one of the biggest indirect tax reforms in India. This idea was introduced in India in the year 2000, however, it is supposed to be in action from mid-2017. Let us throw some light on the positive and negative impacts of this bill:

Pros:

1. It would be a transparent tax; it would help building a corruption free tax administration system
2. It will not cost to registered retail owners. Currently, a tax is levied on when a finished product moves out from a factory, which is paid by the manufacturer; tax is levied again at the retail outlet when sold. 
3. GST, backed by the GSTN, is a completely integrated tax platform that would deal with all aspects of GST.
4. GST also has an optional scheme of lowering taxes for small businesses with turnover between INR 20 to 50 lacs, known as the ‘composition scheme’. This slab has now been proposed to be increased to 75 lacs. This will bring respite from tax burdens to many small business units.
5. GST has a prospect of removing cascading tax effect, building a simpler online procedure under GST, creating a defined treatment for e-commerce and regulating the unorganized sector.
6. Consumption of various goods & services will increase and prices will come down, thus benefitting the common man.
7. The common man would be happy to find price-cut in movie tickets, restaurants, two-wheelers, entry-level sedans, SUVs, washing machines, and stoves.

Cons:

1. According to some Economists, the real estate sector might suffer as the addition to the cost of new homes could be 8 percent and the demand would decrease by around 12 percent.
2. Few products that have only 4 percent tax imposed on them would become more expensive.
3. Experts say that CGST(Central GST), SGST(State GST) are only new fancy names for Central Excise/Service Tax, VAT and CST. Hence, there is no major reduction in the number of tax-layers.
4. The common man would face price-rise in mobile bills, insurance policies, rented property, school fees, courier services, aerated drinks, metro/train fares, healthcare services, DTH and Wi-Fi services, investment management services and cigarettes/tobacco.

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The post Goods and Services Tax: GST For or Against the Common People! appeared first on StarZing.