Let’s talk about
my favorite topic-economics. Economy is the prime reason of giving employment
to the citizen of a nation in the modern era. If a nation has a ruined economy,
believe me! The world is not going to invest in that nation. To improve economy
Government should impose good tax system in the nation. In the financial budget
of India, Finance Minister Arun Jaitley proposed that GST will be
applicable from 1 April, 2016. Analysts believe that the execution of the goods
and services tax (GST) could offer the rate of increase of
productivity. GST will increase the GDP of India & will counter the
tax terrorism of the nation. Today I am going to explain the various benefits
of GST for the Indian economy and how it will help the common man. The
benefits of GST are:-
1) FUSED MARKET- The GST
will cut down the various numbers on taxes obligated by the central government,
i.e. Central VAT or excise duty, services tax, central sales tax on interstate
sales, etc. And states, i.e. entertainment tax, VAT on sales, luxury tax and
octroi. This will result in the creation of a combined or unified market, which
would ease the endless movement of goods across states and decrease the
transaction revenue of businesses.
2) LOWER
ENCOURAGEMENT FOR TAX EVASION: In present scenario, companies have to
pay taxes on complete original value of the product/service, but under GST,
companies will have to pay tax only on the value-addition (means cost of a
product will decrease for consumer). Therefore, the actual tax paid will
likely be small and decrease the incentive for evasion.
3) WIDEN
THE TAX BASE: GST will provide credits for all taxes paid prior
in the goods/service chain incentivizing taxpaying companies to spring inputs
from other known or recognized dealers. This will carry in extra revenues to
the government as the unorganized sector, which is not part of the value chain,
would be drawn into the tax net. Moreover, states will be provided for tax
services (as opposed to only the central government) under the GST.
4) DECREASE IN THE COST OF PRODUCT/SERVICE: The biggest
beneficiary of GST will be the common man of this nation. The common man
is tired of the high cost imposed on everything. A biscuit packet whose weight
is 100gms costs 10-15 INR (based on company) will cost 8-12 INR, it will help
to control inflation for the common man. Fuel prices will decrease as Govt.
would not impose tax on taxes.
According to the
National Council of Applied Economic Research, government's
tax income will augment by about 0.2 per cent because of GST execution,
while GDP growth could increase by 0.9-1.7 per cent. Exports will also get a enhance
as they are zero-rated for taxes and also as the fall in cost of produced goods
and services under GST will increase the competitiveness of Indian goods
and services in the foreign market.
However, the rate
will be decided by centre & state on the services which may vary from
16%-27% on the original cost.
THINK- Cost of a
biscuit packet is 10 Rs. after all taxes, its original cost is 6 Rs. Now if GST
applied on this & we delete the rest of the taxes its cost would not go
above 8 Rs. That’s how GST will benefit the common man and it will be a
huge game changer. Now it’s on our parliament to pass it & then impose it
from 1 April, 2016. I hope this will solve a number of problems related to our
nation.
Thanks for
Reading!
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