The Goods and Services Tax (GST) is known to be a game changer in the history of Indian economy. This change has been done in many countries in the world to improve the economy and to give businesses and opportunity to grow and give a competitive edge to the country. As GST Application is a biggest taxation change, it is considered that it needs approximately two to three years to stabilize. After the GST roll-out, the common population of our country is facing a lot of issues such as they are not familiar with SGST and CGST, unaware of the distribution of the taxes and they want to know the benefit that end consumers will be getting. Several businesses and stakeholders were unable to understand the taxation structure, the procedure involved in filing invoices, claiming ITC and the software used to calculate the GST. However, the Government has left nobody from the taxation regime be it industrialists, small businesses, dealers or consumers. Let’s discuss about the GST roll-out impact and what government has set-up for the teething troubles that are arising.
Impact of GST on Indian Economy
The biggest question that comes in mind of every citizen of India is that who are paying tax, who are exempted and how it will increase the Government’s revenue? Government has bring almost every business under the GST various schemes even if they aren’t eligible for paying GST. Schemes like voluntary plan, composition scheme and so on are designed especially for those with small businesses or entrepreneurs who were previously doesn’t paying the taxes. All this will directly or indirectly result in increase of the overall GDP. GST will increase the tax collection and reduce the budget deficit, thereby Government will be able to spend more on economic development.
GST Impact on Consumers
That said, the cost of most of the goods is likely to come down after the GST roll-out whereas the services that are availed by the consumers such as telecom, financial, banking, e-commerce, housing, dining, airfare, society and so on will go up. Services like television, processed foods, movie tickets, cements will become cheaper. If we talk about automobiles, they are going to get cheaper, whereas the price of small cars are going up.
What does Anti-Profiteering Provision means for Large Corporate Houses?
An anti-profiteering provision has been made after the GST roll-out which says that every business or industry has to pass on the benefit that has been generated due to reduction in costs of goods and services. As the businesses can avail it by claiming ITC. If the supply chains are unable to register or file GST, the cost of the products will either be absorbed by the government or have to be passed on to the end consumers. However, the transfer of benefits is still not clear due to uncertainty in demands and change in the distribution models and thus the inventory is likely to go up.
Impact on SME’s
Small businesses are also liable to pay GST. However, there is a limitation of tax amount for them according to the schemes and taxation slab. According to the GST provision, if the annual turnover of the businesses is more than twenty lakh but less than seventy-five lakhs, they can register themselves under the composition scheme of the GST in which tax has to be paid quarterly at a nominal rate. After GST, the distribution of goods is well-organised and synchronized with the rates due to which there will be no need of agents across the states to clarify the rates of each product. There is a possibility that issues may arise, but, in the long run GST will be beneficial for the stakeholders and Indian economy.
The Bottom Line
After the current GST application, things have been different. Unexpected problems are arising which might not be in the favor of businesses and the large industries. Moreover, the common population is thinking that they aren’t benefited with the GST roll-out. However, from daily need products to automobiles, hotel services to movie tickets, the price of almost half of the things have lower down. Thereby benefiting the end-consumer. In case of businesses, they might face problems in filing taxes, uploading invoices, but at the end, they are the one who are getting the most benefit as they can claim their money back in the form of Input Tax Credit from the Government.