India’s most important economic reforms in the coming years will change the face of Indian economy permanently by amending the existing tax process by a new single now. At the same time, due to the increase in the taxation rate on certain areas may have negative effects.
Here are some affects GST implementations:
- Easier interstate movement of goods: It’s very hassle-free to buy across the States as a unified tax structure will allow smooth movement across the limits of the State. Currently a major pain Interstate logistics area which state tax and Zakat authorities waiting for evacuation by trucks with the long queue is a common sight on the highways. It will soon be found in the past because it would be free movement of goods possible within India. It is estimated that it will cost to reduce the distribution cost by 10-15% and at the same time will reduce the time taken to transport. Due to less transport time along with the list, it will also open a wide base of suppliers, which will push down the cost and more.
- Prevention of Double Taxation: In the current system, VAT, CST, excise, aktoi States and the Central Government is being imposed by the authorities. Some of these taxes are levied on top of other taxes, which have a broad impact. It is quite a hike in the cost of goods by a single payment, it is expected that a significant reduction in the cost of goods (based on the tax rate for GST). The advantage of this cost can be passed.
- Uncertainty on Tax Incentives: Some industries or companies tax incentives (such as all proceeds and discounted VAT tax holiday for 10 years and renewable energy sectors for sale) with the rise of a single tax to abandon these incentives. Government to manage these promotions still is working on a framework. However, the possibility remains that some may see an increase in input costs. Currently most of these promotions many supply chains are designed for. Company to reduce costs they may completely restructure.
- Ease of Doing Business with SME’s: Almost all Indian corporations, no matter how big, although a large number of SMEs in supplier first, SMEs have had so many tax incentives, their complete input on the amount given by the tax credit will be able to claim. It effectively, reduce the burden of tax on them, so will the price. In addition, operates locally first, SMEs, which generally is limited to those States where lack of resources they were based. Now, with a similar Pan India tax, State of SMEs across borders will be much easier to conduct business. GST from the exact implications will reveal the coming months and years. However, it is to improve the business environment in India is too long will come in and it would be quite positive long-term results.
Additional Benefits of GST:
- In improving Transparency and Ensuring Compliance across Members:
The idea is to curb tax evasion and promote tax compliance, which will definitely build trust among businesses and consumers. The use of a robust IT infrastructure provides a means of reducing tax inaccuracies as well as enhancing tax responsiveness making the tax process seamless. This order to business makes the country free from corruption.
- Economic Recovery:
This reduction in costs will improve consumption and output, which will subsequently lead to an increase in the country’s economy. The problem of cascading taxes being charged on goods and services provided will mean that GST will relieve considerable tax charges when using goods and services. A simplified tax structure will attract foreign investments making the economy even stronger.
- Wider Market Reach:
The GST will level the playing field for different businesses across the nation as there will be no taxing discrepancies between states. As a result of this uniformity, Indian businesses will become more competitive on both national and global levels. Companies will be able to streamline their supply chains and cut down operational costs, making them more competitive in the international market.
- Adequate Tax Revnue:
With low tax rates under the GST, there will be a broad tax base that will yield higher revenue collections for both the central and state governments. The increased revenue can be used for the construction of the infrastructure of the country and providing good social amenities to the citizens of the country, enhancing the welfare of the people of the country.
