What is GST?GST is a form of Value Added Tax that would include all the indirect taxes into one throughout all the regions of India. That means every state will have the same GST rate unlike now where the states can fix their own rates
More competitive business environment: l shift the burden of taxes from the manufactures in India where the tax system is unfairly skewed towards the consumers. Manufacturers will pay lesser taxes and there will be an environment of greater competitiveness and more freedom in business.All confusion regarding what is a manufacturing or service activity will be removed. All economic activities will be "economic activities" only and will be taxed.
Every coin will have its own possitive and negative side The Centre will fix the percentage of revenue to be shared with the states. Thus the autonomy of states will be compromised.The money that was not taken from the producer under the system of tax credit in GST will be recovered from the consumers, which definitely is a negative for the "consumer community
This is definitely a big burden for the taxpayers(common public).Some of the states may even suffer a loss on the account of tax sharing and the center itself may decide on the one-time compensation.Extreme high interest rates for the hotels as 28% will hit the crowd directly and immediately.This might even dig out the well-renowned hotel community.Gold rates getting higher day by day is an impact of this gst at 3%
Now, let's have a look at the Pros and Cons of GST system.
A healthier business platform:
It's going to ease the stress of taxes from the Indian manufacturers. They now have to pay lower taxes, and it will increase the scope of a better business environment and flexibility.
Similar tax rate over the nation:
Everyone wants to scrap the rates to drag higher number of people towards his product. However, it has been seen in many occasions for the states to reduce the VAT prices to make it lucrative for the investors. In such cases, it's definitely a loss for both centre and state. Through GST you can have a uniform tax rate that can avoid the above kind of issues.
Can unite the whole nation from economic point of view:
Similar tax rate at each state would make a better trade in the nation among various states. At present, no tax credits are offered for trading in the nation between the states. Ultimately, the whole nation can be chained perfectly through the economic thread.
GST is always simple. There would be nothing baffling remain like a manufacturing or service works. The entire economic processes of the nation can be fairly taxed. You won't have to scratch your brain about different taxes; a single tax would fix everything.
Undoubtedly, this is going to be simpler to get, and sleeker to operate as well. In fact, it could be made a policy point for a better understanding of VAT for the traders. Apparently, the whole process of management and understanding the taxation system will be simpler.
More number of tax payers:
GST can make a higher count of the tax payers. Hence, the cut in tax rates can be well manifested by the increase in number of tax payers.
Those were the positive parts. Now take a look at the negative sides that the GST involves.
A dominating centre:
It's quite apparent that the whole process of GST is going to make Centre a way lot powerful as the Centre has to specify the rate of revenue that has to be shared with the states. There is every chance for some states to put up with a loss in terms of tax sharing. In addition, the centre might fix everything about the whole recompense. The centre can hike the tax rates for states for compensation. Many protests are quite obvious to appear.
Not a good choice for some states:
Especially, the states like Jharkhand those are more dependent upon their products, rather than services now have to share their revenue with the government. It's going to make a huge loss for them as they don't have adequate service for compensation.
Not consumer friendly:
GST is going to fetch the amount from the consumers that used not to be taken from the manufacturers through tax credit system. Undoubtedly, this will make the consumers unhappy.