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    GST-a Single Point Efficient Tax System or An Economic Disaster?

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    Angel
    GST is India's biggest indirect tax reform that aims to simplify taxation by subsuming multiple taxes into a single tax applicable to goods and services. While GST could help integrate state economies and boost growth by reducing costs, its implementation has faced some challenges. Smaller businesses may struggle with the transition to online filing and higher tax thresholds under GST. However, most experts believe that in the long run, once issues are addressed, GST will lead to benefits like increased transparency, reduced costs, and a more competitive business environment through elimination of cascading taxes and easier export competitiveness.

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    GST-a Single Point Efficient Tax System or An Economic Disaster?

    Uploaded by

    Angel
    22 views2 pages
    GST is India's biggest indirect tax reform that aims to simplify taxation by subsuming multiple taxes into a single tax applicable to goods and services. While GST could help integrate state economies and boost growth by reducing costs, its implementation has faced some challenges. Smaller businesses may struggle with the transition to online filing and higher tax thresholds under GST. However, most experts believe that in the long run, once issues are addressed, GST will lead to benefits like increased transparency, reduced costs, and a more competitive business environment through elimination of cascading taxes and easier export competitiveness.

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    GST

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    GST is India's biggest indirect tax reform that aims to simplify taxation by subsuming multiple taxes into a single tax applicable to goods and services. While GST could help integrate state economies and boost growth by reducing costs, its implementation has faced some challenges. Smaller businesses may struggle with the transition to online filing and higher tax thresholds under GST. However, most experts believe that in the long run, once issues are addressed, GST will lead to benefits like increased transparency, reduced costs, and a more competitive business environment through elimination of cascading taxes and easier export competitiveness.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    22 views2 pages

    GST-a Single Point Efficient Tax System or An Economic Disaster?

    Uploaded by

    Angel
    GST is India's biggest indirect tax reform that aims to simplify taxation by subsuming multiple taxes into a single tax applicable to goods and services. While GST could help integrate state economies and boost growth by reducing costs, its implementation has faced some challenges. Smaller businesses may struggle with the transition to online filing and higher tax thresholds under GST. However, most experts believe that in the long run, once issues are addressed, GST will lead to benefits like increased transparency, reduced costs, and a more competitive business environment through elimination of cascading taxes and easier export competitiveness.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    GST- a single point efficient tax system or an economic disaster?

    GST is the biggest indirect tax reform of India. GST is a single tax on the supply of goods and services. It
    is a destination based tax. GST will subsume Central Excise Law, Service Tax Law, VAT, Octroi. GST is
    expected to bring together state economies and improve overall economic growth rate. It is a
    comprehensive indirect tax levy on manufacture, sale and consumption of goods as well as services at
    national level. There are around 160 countries in the world that have GST in place. GST is a destination
    based taxed where the tax is collected by the state where goods are consumed. India has implemented
    from 1st July, 2017 and it has adopted the Dual GST Model in which both states and central levies tax on
    Goods or Services or Both. There are three types of GST:

    SGST: State GST, collected by state govt.

    CGST: Central GST, collected by central govt.

    IGST: Integrated GST, collected by central govt.

    GST will mainly remove the cascading effect on the Sale of Goods and Services. Removal of Cascading
    effect will directly impact cost of goods. The cost of goods should decrease since tax on tax is eliminated
    in the GST regime. It will have transparency in taxation system. More efficient neutralization of taxes
    especially for exports thereby making our products more competitive in the international market and give
    boost to Indian Exports. Common procedures for registration of taxpayers, refund of taxes, uniform
    formats of tax return, common tax base, common system of classification of goods and services will lend
    greater certainty to taxation system.

    Major Drawbacks of GST was Increased Cost due to software purchase. As it was introduced in the mid-
    year, businesses followed the old tax structure for the first 3 months (April, May, and June), and GST for
    the rest of the financial year. Unlike earlier, businesses are now switching from pen and paper invoicing
    and filing to online return filing and making payments. This might be tough for some smaller businesses to
    adapt to. Smaller businesses, especially in the manufacturing sector will face difficulties under GST.
    Earlier, only businesses whose turnover exceeded Rs 1.5 crore had to pay excise duty. But now any
    business whose turnover exceeds Rs 20 lakh will have to pay GST. SMEs with a turnover upto Rs 75 lakh
    can opt for the composition scheme and pay only 1% tax on turnover in lieu of GST and enjoy lesser
    compliances. The catch though is these businesses will then not be able to claim any input tax credit. The
    decision to choose between higher taxes or the composition scheme (and thereby no ITC) will be a tough
    one for many SMEs.

    Change is definitely never easy. The government is trying to smoothen the road to GST. It is important to
    take a leaf from global economies that have implemented GST before us, and who overcame the teething
    troubles to experience the advantages of having a unified tax system and easy input credits.

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