In the Indian history, 1st July 2017 marks the beginning of a new era. Indian government introduced GST or Goods and services tax after crossing all the hurdles in its way. Overnight, billions of lives were affected and changed. Till 30th June, half of the population of the country was not even aware of GST. GST or Good and Services Tax is an indirect tax, applied throughout the country, replacing a number of other indirect taxes like VAT, service tax, CST, CAD, etc.
The main aim of GST, as proposed, is to lower the burden of taxes on the manufacturing sector, so that the manufacturing cost reduces. The lower prices of manufacturing will lead to an increase in the demand/consumption of goods. Increased demand will lead to an increase in supply, further leading to rise in the production of goods. But with the implementation of GST, prices have increased heavily and the supply rate has gone down. Its impact can be seen on the grocery stores, which now fails to meet with the demands it was once used to.
Goods and Service tax, undoubtedly, was introduced to boost the Indian Economy. But, India has the highest GST rate in the world at 28%.Was it really introduced to boost the economy? It remains a big question, left to be answered by the government. Most of the services like telecom, banking, airlines, etc have become even more expensive. The cost of services have increased, adding on to one's own monthly expenses.
However, the postive impacts of GST cannot be neglected.It will replace 17 indirect tax levies. It is a unified tax regime which wil see a decline in corruption. It will make India’s import and export much competitive and increase domestic as well as foreign investment. Eventually, its benefit would be enjoyed by the common man.
The rich may cope up with the changing demands, the poor may die of poverty but it is the common man who gets affected by the changes. Under GST, things like mobile bills, health care, residential rent, school/college fees have become costlier while dining in restaurants, buying two wheelers have got cheaper. Even if it is a unified tax system removing a number of other indirect taxes, it becomes very complex for a common man to understand it completely. It is very difficult to decide whether it has ameliorated the Indian Economy or has deteriorated the Indian economy without understanding GST completely. GST is indeed a real game-changer. It will take a long time to decide its real impact.
The Vajpayee government was the first to talk about the idea of GST in 2000.With its implementation under the Modi government, it is a dream come true of independent India. It was a lifelong dream of having -One nation, one market and one tax. It is expected that Goods and Service tax will improve the collection of taxes and condition of Indian economy in the long run. What is your opinion of GST? Will it promote the Indian economy to new and higher levels or will it debase it? What do you think of it?
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