The aftermath of 1st July 2017, we all entered a new tax regime. This new taxing system was called Goods and Services Tax (GST). GST was launched with an idea of One Nation One tax and submerged all the previous indirect taxes like VAT, Excise, Service Tax etc. These indirect systems have numerous plot holes which compelled the customers to pay similar tax on multiple levels of production.
As the customers are the end users of these products you must know that the ultimate impact is on you. Every good or service ever produced in a commercial market will face the impact, sure the producers and wholesalers will pay the tax but consumers will be the ultimate bearer. However, there is nothing to worry about. The implication of GST has brought some benefits for the end user or more appropriately the king of the market chain-
- Reduced prices for Goods and Services-
In the previous practice, the excise paid by the manufacturer was not deducted for VAT calculation. Let’s assume that a product’s price is 100 and the excise tax paid by the manufacturer is 11. So, when the customer paid for the product he used to be billed for the collective amount of 110. And the VAT which is paid by the consumer was calculated on 110 and not on 100. By the rule of one nation one tax this duplication will be canceled and the ultimate product’s price will drop.
- Uniform Prices-
Earlier we had a state Value added tax which was charged on the sale of goods and services. As the tax rate were different in every state the price of each product was different in every state. With GST, one constant tax will be equally charged on every product. Hence, creating a constant price of products throughout the nation.
- Transparency in Tax System-
The previous tax structure was too complicated for a normal person to understand. By the introduction of GST, everyone has got a good idea of what the tax is and how will it function, hence boosting transparency and trust within the citizens.
- Better accessibility of products-
Earlier the customers play absurd tricks to save tax by buying products in bulk from the state with lesser price. GST will save the pain of traveling as every product is at the same rate. Also, this will give online businesses a chance to rewire their warehouses on a simpler method and not complicate things with different taxes. This will increase the proximity of goods and services.
The above aspects showed how GST has affects the consumer’s life in a positive way. Below is one argument which says otherwise-
- Cess and Costlier Services-
Some of the experts claim GST to be an attempt to charge more money in the name of additional cess charged on products like tobacco, aerated water, motor cars etc. and costlier services charged on hotels, movie tickets etc. costlier services earlier were charged on 15% which now is at 18 or 28%.