How has the GST impacted the Indian Economy so far?
GST has been a revolutionary step taken by the Indian government in the year 2017. The idea is to apply GST across 29 states and 7 union territories to benefit all sections of society. Effortless bookkeeping, fewer tax filings, and crystal clear rules were some of the attractions of the system for manufacturers. Moreover, the benefit of less payment for goods and services is what made consumers digest the revolutionary step. Not to forget, the GST system also promised to block revenue leaks, thereby allowing more revenues for the government.
However, no plan can be called “successful” or “unsuccessful” without peeing into the ground realities.
Has GST made the right impact? Let’s first understand GST better, and then we’ll be equipped to analyze its impact!
GST- Explained in brief!
The Goods and Service Tax is levied on each and every stage of manufacturing along with sales of goods and services across the country. The GST is levied when services and goods are consumed.
Let us know the three categories of Goods and Service Tax (GST)
Central Goods and Services Tax (CGST)
The first category that we’ll be throwing light upon is the Central Goods and Services Tax. As the name suggests, this tax is collected by the Central Government. The tax is levied on the the interstate sale of goods and services.
State Goods and Services Tax (SGST)
This particular tax is collected by the State Government. This tax is levied on intrastate sales of goods and services.
Integrated goods and Services Tax (IGST)
The Integrated Goods and Services Tax is collected in case a supply of goods and services is supplied from one state to the other. The IGST is collected and shared by both the State and the Central Government.
Digging into the impact of Goods and Services Tax (GST) on the Indian Economy
Introducing, promoting, and implementing “one nation, one market, one tax” has indeed been a very brave yet interesting step. Did the GST benefit the country? In some aspects, yes. The following are the major impacts of GST that deserve some discussion.
1. Additional funds for production
The Goods and Services Tax has greatly reduced the total taxable amount. This gives the benefit of the saved fund to get actually put back into the investment cycle, thereby accelerating production.
2. An effortless tax structure
If there is one thing that everyone in the country unanimously is grateful for after the advent of the Goods and Services Tax (GST), it is the simplified tax structure that they have received. Yes, with GST, the Indian taxation system has got less complicated than before. What benefit does a less-complicated tax system offer? Well, it makes tax calculation easier than ever before. Additionally, it gives the consumer a crystal-clear idea of the amount paid in the form of tax while purchasing products and services. Not to miss, the benefit of a simplified tax system has impacted the GDP substantially.
3. Enhanced export volume
Long story short, the Goods and Services Tax (GST) has led to the reduction of customs duty on exports. This means that production units preserve money not only at the time of producing goods but also at the time of shipping them. Production units across the country have been greatly impressed by this two-way savings, and thus, have increased their export quantity.
4. Fostered operations across the country
GST has given a unified taxation system to the whole country, which has eased the process of transporting goods around the country. This has certainly boosted operations in India.