Goods and Services Tax is an indirect tax imposed in India on the supply of goods and services. It was introduced on 1 July 2017 in India. Advantages of GST and disadvantages are as follows:
Advantages of GST
- 0% tax on essential commodity – Now there will be 0% tax on commodity such as vegetables, honey, newspaper, books etc. before GST we have to give VAT tax in some states.
- No tax on tax – Earlier if tax is imposed on a thing and then if tax is charged again we have to pay tax on earlier tax also. Now we don’t have to do that by that prices of all things will reduce.
- Make in India – Now we have to pay custom duty as well as IGST on imported goods because of that price of imported products is very high by this mostly people will purchase goods produced in our country.
- Fully Computerised – It includes no paper work which helps in reducing corruption chances.
- Maximum Rupees 10,000 In Cash – Businessman can pay maximum 10 thousand in cash and more then Rs.10000 needs to be paid through modes other than cash.
- Credit Back on Inter State Transaction – Earlier when we send a product from one state to another state than we gave to pay 2% cst that is approx. 50 to 60 crores because of this the whole burden of that is on public.
- Profit Of State For 5 Years – If any state suffer loss related to tax than Indian government for next five year will give its profit.
- Anti-Profiteering Provision – Before GST if on any product tax increases or decreases than its profit is taken by business persons but now when GST has come government has made anti profiteering provision.
Disadvantages of GST
- High Tax Burden for Manufacturing SME’s – Till now manufacturing business having turnover more than 1.50 cr has to pay excise duty but now this value has reduced to only 20 lakhs.
- Operating Cost Will Increase – Till now small businesses don’t need any professional to pay indirect tax and service tax but now they have to heir professional to file return and deal gst in behalf of company.
- Increase in Taxes Will Increase Prices – This means now we are paying more tax on some products which will increase the product price.
- Petroleum Products Are Not Part of GST Yet – That is not good for economy because all states will impose local tax accordingly.
- Non-Anti-Inflationary Measure – As GST is implemented in Canada, Australia, New Zealand in these three countries inflation increases rapidly although it was normalise in a year they controlled it because they have taken prevention for it.
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