What is GST? Pros and Cons of GST
1 year ago sarkariadmin 0
Goods and Services Tax – The “One Nation One Tax” system was implemented from 1st July 2017 in pan India. The Goods and Services Tax (GST) is a value added tax that will replace all the indirect taxes levied on goods and services by the government,both central and states, once it is implemented.The basic idea of this bill is to create a single, cooperative and undivided Indian market to make the economy stronger and powerful.
Following taxes are going to be included under GST:
- VAT- Value added tax
- CST – Central Sales Tax
- Service Tax
- Central Excise Duty
- CVD – Countervailing Duty
- SAD- Special Additional Duty
GST has proposed a total of 4 tax slabs:
- Exempted categories – 0
- Commonly used Goods and Services – 5%
- Standard Goods and Services fall under 1st slab – 12%
- Standard Goods and Services fall under 2nd Slab – 18%
- Special category of Goods and Services including luxury – 28%
Pros of GST bill:
- GST is transparent tax and will reduce prices of goods and services.
- There will be no hidden taxes.
- Benefit people as prices will come down which in turn will help companies as consumption will increase.
- It will also help to build a transparent and corruption free tax administration.
Cons of GST:
- Some Economist say that GST in India would effect negatively on the real estate market. It would add up to 8% to the cost of new homes and reduce demand by about 12%.
- Services will become expensive.e.g.Telecom,banking,airline etc.
- Being a new tax,it will take some time for the people to understand its implications.
- Petroleum products are not part of Goods and Services Tax yet. key petroleum products like crude, natural gas, high-speed diesel and ATF (Aviation Turbine Fuel) have been kept out of Goods and Services Tax. Compliance costs are likely to rise because of dual indirect tax mechanism.
- Problems faced by E-commerce.