Much has been said about GST. It has become a coffee table topic about which everyone is talking about. However, very few know how GST can affect their lives. They don’t know the immense influence GST has over human lives. So, how GST can affect you? How can it affect your life?
It has been said that GST has the power to transform India into a big market place. It holds the strength to change India into a country with ease of business. GST is probably the most important financial reformation India has ever seen. It is also kind of complicated. To understand GST you must understand the tax system of the country.
So what is GST? How it can help people of India? These two questions need to be answered before any further discussion about the system.
GST is indirect tax which is guaranteed to be levied lest the business deals with product manufacturing or services. The tax would get applied on the value of the product. The tax will get applied on different stages of the manufacturing process.
For different goods and services there will different GST depending on the state. For the goods and the trades that are exchanged between different states, there will be different kind of GST which will be known as state GST. This tax will be collected by the state.
There are 8 different kind of excise duties. The rates of the excise duty gets decided by the volume that is produced. In value added tax as well, three different rates are found. What are goods that are taxed and what are the rates will depend on the state. All the states can have different kinds goods that would get exempt from tax.
How GST will be helpful?
This is a big question which everyone is asking. How can GST be helpful?
First, it can erase the limit of tax between the states of India. GST with is power of collaboration can turn India into a single business place where all the states are working together. However for this dream to take place and turn into a reality, it is important that the government influence of levying tax gets nullified. Only when this step is taken, India can break the tax barriers that are keeping the states separated.
It will help the consumers as well. Now, consumers have no idea about the extent of tax that they pay. With the application of GST the taxes would be paid at the consumption point. The most important benefit would the nullification of tax on tax. The moment the tax barrier between the states is broken, the additional tax would get nullified.
There are other benefits of GST which with time people will come to realize. However, right at the moment people needs to acquire information and get to know GST better.