What Is GST And How Does It Really Impact Us? Find Out!

What is GST? If you've been pondering the real impact of the GST tax regime we are moving to, learn more here.

What is GST? If you’ve been pondering the real impact of the GST tax regime we are moving to, learn more here.

GST is the buzz word of the year! Anyone quoting the terminology anywhere has heads turning towards him or her. The heads are turning to either know more about the alien term or to see the person quoting it, as he would be perceived as the guy who really knows it all!

You know apart from the slabs and the percentage of 5%, 18%, 28%, which are being flashed in every newspaper against different items, GST is nothing more than a new way, by means of which the goods and commodities would be taxed; or you can say government is shifting to new model of taxation.

We, the regular middle class, have never actually bothered to know more about the taxes we pay on different goods and services and how it reaches the government.

We have never had any means to find out, whether the rise in prices or overpricing, had anything to do with the taxes imposed by government, or with the seller making hefty profits in the middle. Now, with the new tax regime called GST, at every point, there will be an indirect check on the rise of prices by the middle men, and every next person reselling the product. There is a benefit to the retailer/seller in taxes by actually declaring what he has paid to the wholesaler for the product he is selling. So at every point there is a check and the motivation in-built to declare the effective change in price. It has all the ingredients to work for the benefit of you, me and the government.

Let’s see how: the dress you are buying has moved around from manufacturer to wholesaler to retailer to finally you. As there is more transparency on what every middle man is making as profit, the chances of you being overcharged will be less. Also, the retailer will have to file actual taxes to ensure that he received the benefits due to him; so hopefully, we will have more sellers/businesses paying taxes, and government benefits too. In the long run, income to government, better GDP, better economic condition, win-win for all of us!

Also, if we truly assess the different tax brackets created under GST, the majority of items required for daily consumption are either exempt or charged less. For example, fruits, vegetables, pulses, tea etc. are all comfortable to your pocket as they are exempt from tax or are available under the lowest tax slab, whereas luxury items like automobiles, motorcycles, aircraft for personal use, and yachts will be charged in the highest slab of 28% and these items are neither consumed on a regular basis nor affects the middle class majorly. There are a whole lot of items and slabs falling between the exempt and the high slab rate, and the impact would differ from person to person based on the usage and lifestyle. So, to generalize the impact on individual pocket would be difficult.

What is important is to appreciate the effort and initiative taken by the Government, to make life simpler for all and more transparent for all the parties involved. Like demonetization, we would be facing teething issues and the required technological support and platform, will take time to reach the masses. The implementation would take a few months for a country as vast as ours; but we can all be rest assured, the direction and the vision, would take us to a better economy with  better tax participation from all sections.

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Top image via Pixabay

First published here.

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shaily shah

Hi, I am Shaily Shah; after a good stint of 14 years in corporate life, trying my hands at something i really liked doing as a teenager; writing my heart out! Also, by means of read more...

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