GST! BOOM!

GST_card_HERO

GST! The tax bomb exploded on 00:00 hours on July the 1st of 2017 amidst the boycott of the event by the party which introduced the bill. The bill which had been stuck for over a decade, came into effect today.

Let’s get straight to the point.

Here are the effects of GST  on the consumers, businesses and the Indian economy:

  • Efficiency of the taxation system will improve significantly.
  • Tax base widens.
  • One nation, one tax, which means an national market.
  • Several state and central taxes are ousted by GST.
  • A fair business playing field.
  • Automation of compliance procedures
  • Tax credit for manufacturers.

Here are the things that will become expensive:

  • Eating at restaurants.
  • Travel expenses
  • Credit card bills and insurance premiums
  • Jewelry like gold,silver,diamond and other precious stones.
  • Telecom( TRAI has asked the government to reduce the tax).
  • Cosmetics
  • Cheese and butter
  • Tableware
  • Biscuits
  • Wristwatch
  • Baby food
  • Clothes
  • Transport vehicle,etc.

 

Things that will be cheaper:

  • Food grains
  • Cereals
  • Milk
  • Jaggery
  • Common salt
  • Musical instruments
  • Cars
  • Motorcycle
  • Iron ore
  • Renewable energy devices
  • Stationery, etc.

 

Bonus information

ey-rate-classification-for-goods
Pie chart source: ey.com

 

 

  • Removes custom duties on exports.
  • Inflation is expected but could be checked because of the anti-profiteering powers of the bill.
  • Increases the revenue of the government.
  • The bulk revenue makers for the government like real estate, electricity, alcohol, cigarettes,etc were not included in any of the slabs.
  • It is flawed because of multiple rates.

 

It’s definitely a good economic reform for a better and a stronger economic future.

 

 

 

 

 

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