Impact and Relevance of GST & Hurdles in Implementation of GST. Check Impact of GST on Indian Market. Details for GST Impact on Indian Economy, GST is a solution provider by lining up total indirect tax structure of all streams into one single tax payable by the companies. The impact of this will be on the all multinational companies and facilitates for ease of doing business and adds factor to the globalization and liberalization. Now Scroll down below n check more details for “Impact and Relevance of GST & Hurdles in Implementation of GST”
Article 279A empowers the GST Council to make recommendation to the Union and States on the rates including floor rates with bands of goods and services tax.
Impact and Relevance of GST
GST will have impact on the following:
- All the taxes (viz. excise duty, service tax, octroi, luxury tax, etc) will be consolidated resulting in one tax.
- A new classification of producing states and consuming states will be emerged – resulting producing state will get compensation whereas consuming states will earn revenue.
- Expensive goods may become inexpensive because of reduction of taxes and duties like VAT, Excise duty etc.
- Essential food items which are currently out of the tax regime, may continue to be available at cheaper rates and hence, essential goods supply prices may not change.
- Processed food will continue to be taxed and available at cheaper rates, as the applicable GST is likely to be lower than the current combined tax on such products
- Petroleum products are proposed to be kept out of the GST for first two years, as a result prices likely to change and resulting variant in the prices across the states.
- Cost of services will be high with the introduction of GST, as existing service tax applicable to almost all services. Services, in particular, premiums on insurance , investments and other financial services cost will be higher and expensive .
- Sale of goods and services and all online purchases will attract GST at the first point of transaction with the likely rollout of uniform Goods and Services Tax (GST) regime from 1st July, 2017.
- The GST, which will subsume excise, service tax and local levies, will be imposed at the first point of transaction in case of supply of goods, services or online sale. This clears the air on applicability of GST in e-commerce in cases where goods are sold in one state but delivered in another state. The e-commerce companies will be required to file a statement to the tax department providing details of all suppliers made through the online platform.
- As the GST helps in reducing the cost of production and allows free supply of goods the manufacturing companies will be greatly benefited and consequently helps the prestigious project of Government of India ‘Make in India’ by attracting more investments.
Hurdles in Implementation of GST
- Increase in cost of compliance
- Understanding the state and centre relationship
- Increase of inflation in initial years
- Unification of goods and services and removal of distinction between them
- Passing the resolution in GST council where the voting is with involvement of states, which may consume more time with respective State Governments approvals from time to time.
- Awareness of the GST to the common man explaining the benefits till real the cost of the goods are available at cheaper rates
- Impact of expensive cost of services on the common man.
- GST Definition
- When will GST be applicable
- What is IGST
- FAQ on IGST
- Salient Features of GST
- Filing of GST Returns
- GST Tax Payment Rules
- GST Payment Formats
- Article 279A