With GST govt is planning to force many companies to restructure their operations, passing on the benefit of lower tax to consumers, keeping inflation rate low and substantial boost to economic growth. The Indian government is going to welcome GST in the tax structure of the country.
According to the Amendment Bill, it will replace some indirect tax. And the experts opine that it will be highly fruitful to the growth of the economy. More than one tax creates a complicated system, and many businesses have faced the adverse effect. So, if the government enforces GST, it will lead to the positive environment.
However, there is one section of Indian citizens, who are thinking that this new tax system won’t be beneficial in any way. Let’s now see whether GST will generate great profit or considerable loss in the corporate world. Many benefits are expected to be passed on to the end user, govt has already asked telecom companies to cut prices, pass GST benefits to customers. DK Joshi, chief economist of Crisil has written in his report:
It’s not optimal, but let the best not be the enemy of the good. Even with its imperfections, it could usher in significant benefits, especially through a quantum leap in transaction trails and logistical efficiency.
After implementing Goods & Services Tax (GST), tax processing system, refunds and payments may remain under constant observation. It’ll decrease the interference of human users. All the transactions should turn out a check through the electronic system. Thus, it may not give any opportunity to cause money laundering case and may prove itself as anti-corruption game-changer
GST Will Increase Divisible Pool Of Resources To States’s advantage and will increase the share of states in tax revenue; and will curb many tax barriers in the form of CST, entry tax etc. which have fragmented the Indian market. Cascading effects of taxes on cost make indigenous manufactures less attractive and more strained.
Complex multiple taxes increase the cost of compliance. As different tax-related obstacles will be removed due to uniform Goods & Services Tax (GST) system, there may be an incentive. All the states of India will share one market, and the experts believe that it will boost up the production level. A better development of trade is also expected because GST will make the logistics sector more organized and efficient.
GST will, of course, lead to simpler business as: Goods & Services Tax (GST) will replace 17 indirect tax levies, revenue will get a boost, one market will be open for all, logistics, inventory cost will fall, investment will boost etc. Another notable thing is that GST introduction may simplify a number of business-related processes.
While different tax units become merged in one system, GST, several costs, and procedures related to them will also have a decline. Thus, there will be smoother functioning.
GST is one of the world's most complex tax reform because no country of comparable size and diversity has ever attempted a tax reform like this. Presently, because of tax conflicts in transnational processes, some of the sectors need to pay tax for more than one time. All such sectors may include software supplies, copyrights, leasing solutions and many more. In future, they will need to pay only one tax- GST.
Experts say that Goods & Services Tax (GST) roll-out to boost Make in India and create more jobs, GST will boost job creation and hiring may increase by 11%. As there will be more transparency in the tax structure, many foreign and national investors will want to make an investment in various industries of the country.
It will lead to several opportunities for employment. Many citizens may have social and financial development. These are all about the profits from the new GST regime. Now, it is better to know the possible negative impacts.
All are not winners in Goods & Services Tax (GST) implementation many are losers also like: Oil & Gas industry will be adversely affected as it will comply with current tax regime and GST framework, however, clarity is still awaited on this. Corporate sectors that are associated with fertilizer, telecom system, realty, airline and plastic products may not enjoy the positive result with GST.
The indirect tax of all categories won’t be included in GST. And these taxes may comprise excise and stamp duties, alcoholic drinks and many more. Some industries, which can experience inflation, are financial and banking units.
Goods & Services Tax (GST) may add to India Inc's documentation burden, many small businesses are worried to face increased compliance burden due to new rules. Though GST implementation seems to be productive, it is one of the disadvantages. The practical documentation in all the businesses may get increased.
Documentation is essential only to secure the significant papers. Moreover, in the present structure, any business, working in different states, may file one registration for tax. It will be changed after GST.
Many businesses need to keep up a vast stock of commodities in various states. And they will not gain anything from Goods & Services Tax (GST). There may be a loss of consistency in the flow of cash because they have to make full payment for GST, while they move goods out of the state.
In conclusion, we can say that though GST system is acceptable, it is also dreadful to several businessmen. However, everything will not be clear until GST is enforced. In future, it can smoothen up all the processes.