The GST , Goods and Service Tax, which passed on August 9, looks set to unlock India’s latent growth potential. It aims to simplify India’s taxation system by harmonizing the country’s state and central government revenue-raising mechanisms.
Currently, goods in India are taxed by individual states. Services are taxed by the central government, which also levies a welter of further excise and customs duties, surcharges, and cesses. With the implementation of GST, taxes will be levied by the Central government and the States cannot set their own tax rates.
PROS:
1. 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.
2. 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.
3. 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.
4. 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.
CONS:
1. 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.
2. 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.
3. 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.
Currently, goods in India are taxed by individual states. Services are taxed by the central government, which also levies a welter of further excise and customs duties, surcharges, and cesses. With the implementation of GST, taxes will be levied by the Central government and the States cannot set their own tax rates.
PROS:
1. 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.
2. 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.
3. 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.
4. 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.
CONS:
1. 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.
2. 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.
3. 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.