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  • Category: Miscellaneous

    What will be the benefits of GST to the common man? [Active GD]

    Benefits of GST (Goods and Services Tax) to the common man in India appears to be fairly positive. Let's discuss about the advantages of GST that would make India "One Nation, One Tax".

    Benefits of GST to the common man

    Much discussions and debates are going on in the media after the GST bill has been passed by the Rajya Sabha on 03.08.2016 by two-thirds majority. However, its full impact is likely to be felt only after about 2 years as it will take its due time in getting the bill passed by at least 50% of the states and creation of infrastructure for its implementation.
    As far as the common man is concerned, they are interested in knowing as to what benefit GST will make available to them.

    Benefits of GST to the common man:

    Some of the benefits which are likely to be available to the common man after GST is fully implemented in India appears to be as follows -

    1. There will be one tax regime throughout India and time will be saved in calculating the taxes applicable in different states at different rates.
    2. It will facilitate faster movement of goods and services throughout India.
    3. It will eradicate 17 different indirect taxes which is likely to boost manufacturing sector which may result in the availability of goods at cheaper rates.
    4. E-commerce companies will start shipping to more states as inter-state levy will end.

    Let us discuss as to what will be the benefits available to the common man after implementation of GST?
    Update: Please note that all guidelines regarding GDs will be applicable; there is a likely surprise in the prize money though! The GD will be closed on the 08th of August '16 as per IST. Activate your thought processes and push them up here!
  • #574031
    GST(Goods and Services Tax). I think it would be better if ISC announces an Active GD to discuss the pros and cons of GST. In an Active GD, members will have much interest to discuss the issue rather than in a member created threads without any incentives for their time and energy spent on it.
    No life without Sun ¤

  • #574157
    Presently, some states are levying up to 27 - 28% tax, including VAT and other levies such as entry tax etc. Under GST system, the proposed tax rate is about 18% , though some states are demanding for at least 20%. However, the main issue still remains the tax compliance i.e. the evil of evasion of taxes by the traders in connivance with the retail buyers.
    Let us encourage each other in sharing knowledge.

  • #574174
    Please note that the Webmasters have selected this thread as a topic for an active GD. Please participate with quality answers. Tuning of the thread topic & cc will be awarded later.

    Managing Editor,

  • #574180
    Mr. Chidambaram has said that the GST should be limited to 18 percent only. If that is implemented it will be a boost to the common man. For e.g if the manufacturing cost of one litre of soft drink is only Rs. 10/- the cost of the drink to a common man should only be Rs. 10 plus 18% or Rs.10/- which is nearly Rs. 2/-. So, the cost would be Rs. 12/- only. Even if the GST is 25 percent, the cost of the drink would be only Rs. 12.50/-. Even if the manufacturer set some percentage as profit , say 10 percent, the cost would be only Rs. Rs. 10 plus 35 percent of Rs. 10/- (Rs. 13.50). Will we buy one litre cococola or fanta or 7 up or spirite for Rs. 13.50. Can we dream of it?

    Am I right or wrong?

    No life without Sun ¤

  • #574182
    The GST is bound to change the face of Indian economy. In effect, it will bring up the regime of One Country One Tax. That should indeed be a good point from the point of view of everyone concerned. Be it a common man, a corporate or a businessman - the new bill will mean the relief from cascading taxes.

    The provisions are designed to avoid tax evasions.

    Live....and Let Live...!

  • #574183
    My understanding as of now is that as the ultimate buyers and users we, the common people are not going to get much benefit from the GST. The new methods contemplated may be of help to increase the revenue of a few states, and decrease that of a few states if help package is not continued. I am afraid that as usual the benefits of GST go to big corporates, and the final consumer buyer ends up paying more.
    I shall put forth my justifications in due course. I am not an adamant cynic. If during the course, I am convinced that GST to be benefited common man, then I shall gladly change my present view .

    Let us keep faith on ourselves and work sincerely, not leave everything to fate.

  • #574196
    The current state of taxation in India suffers from some inherent problems that tend to overburden the consumers. For instance, a manufacturer is levied tax in the form of indirect tax. This is known as Excise duty. Once the good reaches the retail outlet where it is bought by a consumer, the concerned state government levies a tax on it named VAT - Value Added Tax. Thus the consumer is burdened with dual taxes which hikes the price of the product.

    There are other taxes that tend to increase the price still further. If the product is sold outside the boundary of a state where it is manufactured, the state to which it is sent collects import tax, while the the state where it is manufactured levies export tax.

    Thus, inspite of being one nation, India suffers the fragmentation economically. GST aims to do away with this anomaly. It replaces the 17 indirect taxes ( that's an estimate) and provides a uniform taxation structure.

    Live....and Let Live...!

  • #574199
    Though at the national level there are only two major political parties namely the Indian National congress and the Bhartiya Janata Party, almost all states have one or more powerful regional political parties and most of the states are being ruled by regional parties, often a motley of political parties forming coalition Governments. Each state has its own tax laws and interstate movement of goods is highly regulated. At state borders, a very long queue of trucks can be spotted as if they are entering a foreign land. A major impact of the implementation of GST is likely to ease out such situations.
    Though the GST will have two components i.e. Central GST and State GST but the basic features of law will remain uniform throughout the country.

    Let us encourage each other in sharing knowledge.

  • #574201
    For the common man the biggest advantage would be having a single tax system for all goods and that is levied by the central government. Either too the central tax were varied in each state as compared to central rates. For example in AP and Telangana the state government taxes were 14 percent on goods and services and the CST was just 4 percent. Now that is to be followed , the common man would be immensely benefited with less tax. But what I fear that due to cut in their share of taxes, the state governments may impose higher fees or fines on various state subjects and thus the very purpose of having one tax structure would be defeated. Moreover states are going to loose heavily where there is already a huge collection from direct and indirect taxes. The sales tax department at the state level would be having no work now, and how those employees going to be paid with salaries. ?
    K Mohan
    I consider myself as the learner everyday

  • #574202
    An excellent, relevant and contemporary topic for the GD! I would like to know the last date for submission of responses.
    “Whenever I feel the need to exercise, I lie down until it goes away.” - Paul Terry

  • #574215
    As a layman I am still unable to understand the impact of GST, Yes this is true that some price will be reduced, but some price will go up because of GST. Like payment of mobile bill, bank services like credit card payment, loan processing fees, pharma companies etc. Although there will be price decrease in motor industries, but Petrol, diesel is not included in this GST , So obviously due to GST State Government will loose some tax and revenue and they will not get it properly from Central Government, as we have lots many regional political parties, now suppose state Government increases the taxes in petrol and diesel, then all goods price will go up. SO how can it benefited to customer?

  • #574224
    This constitutional amendment , is yet to be passed by the Lok Sabha and it will enable both the Centre and the States to simultaneously levy the GST.It will absorb all the indirect taxes currently levied, including excise duties and service tax.
    It will be levied on consumption rather than production sector.
    The GST will be having two components keeping in mind the federal structure of India, the Central GST and the State GST.
    The shift to the GST regime will lead to a uniform market across the country. It will be a uniform rate, it will check tax evasion, and boost growth rates according to Mr Arun Jaitley.
    More responses to follow on the above information.

    "If things go wrong, don’t go with them"

  • #574230
    It will be beneficial for only business houses and ease in maintaining and controlling the tax records.
    As per the reports the common man commodities will face surge in prices and the luxury items like Suv will be charged with lower tax rate.
    Overall inflation will be higher after implementing the GST which in turn affect the Common man budget .
    Business Houses and Government ill be in benefit after implementing GST.
    It will also help in lowering tax related fraud .

  • #574241
    Though people say GST is a revolutionary reform, I have my own doubts regarding inflation, which will directly affect the common man. People argue that goods will become cheaper as GST will avoid the double taxation of Excise duty and VAT. As GST rate will be lower than the combined total of Excise duty and VAT, they will get goods at cheaper price. Here my doubt is, will the manufacturers reduce the MRP of goods? I doubt, they will keep the same MRP and get the fruits of reduced tax by themselves. And now regarding services, till now the service tax is levied at a maximum of 14-15 percent. If the GST rate is capped even at 18 percent, the services will cost more to the common man.

  • #574267
    While discussing Goods & Services Tax (GST), we must know about the origin of GST. The Vijay Kelkar Task Force first recommended GST in the year 2004 in its report on the implementation of Fiscal Reforms and Budget Management Act 2004. Incidentally, Vijay Kelkar was the Chairman of the 13th Finance Commission.

    In layman's language, GST was proposed to be introduced by Mr. Kelkar because it was expected that GST would simplify and harmonise the indirect tax regime in the country. GST was expected to reduce the cost of production and inflation in the economy, thereby making the Indian trade and industry more competitive, domestically and internationally. Mr. Kelkar also expected that introduction of GST would benefit the common man and foster a common Indian market and would contribute significantly to the growth of the Indian economy.

    “Whenever I feel the need to exercise, I lie down until it goes away.” - Paul Terry

  • #574283
    One more issue I want to bring out is GST is not a progressive tax like that of income tax. In income tax, rich have to pay more tax as they earn more and poor can be kept out of taxation. But, as GST is an indirect tax, it will affect the same way for both rich and poor. As an example a bathing soap will have the same cost for both rich and poor. So, the common man won't get much out of it.
    But, ease of doing business will be simpler in India because of GST, which in turn can generate more employment, which will be useful to the common man. As GST has both positive and negative effects, it is very difficult stand on one side of the argument.

  • #574319
    Though I could not understand much about GST but I could gather some information from media both print and channels that it has some effect in common man. That is why it take more time to get approved or passed by members of the then government to this government. As such it says oneIndiaone and hence some state which charge additional tax may feel problem and hence we have seen the MPs of AIADMK of TN walked out and could not participate in voting.

    I have learnt that though the price of commodities will reduce, the price of medicines will increase due to this. Also, it is said that it will be for both rich and poor and that is not understandable as whether these many days how these commodities differentiated these two classes of rich and poor.

    One thing is clear that GST in along run will have an effect on the positive side as many visionary projects of government only after a certain period known to the general public about the benefits of GST to the common. Example the roads given to private and people always had a crush on the government about toll fee but that has a benefit of smooth driving which might be experienced by some who are regular travellers of long distance.

    Nice to be in ISC and feel the difference.

  • #574326
    The GST envisages dual structure of taxes - the central GST and State GST. The central GST will replace Excise duty, additional excise and customs duties, service tax and other cesses. State GST is designed to do away the Sales tax, VAT, Purchase tax, Luxury Tax, Entry Tax, Entertainment tax and a host of other taxes levied by state governments.
    Live....and Let Live...!

  • #574368
    GST will be a single indirect tax for the whole nation, which will make India one common market. GST is a single tax on the supply of goods and services, right from the manufacturer to the consumer.
    GST will essentially become a tax only on value addition at each stage.
    Value addition means the enhancement which a company gives to its product or service before offering the product to customers. The GST will basically absorb all the indirect forms of taxes starting from the manufacturer till the retailer and hence it will produce a cascading effect.
    The final consumer will thus bear only the GST charged by the last dealer in the supply chain, with all extra taxes becoming almost negligible at all the previous stages in this chain.

    "If things go wrong, don’t go with them"

  • #574377
    The current state is just the beginning of a larger plan. It will have to go through different phases. The roll out has been stipulated to April 1, 2017. Before that, there are a few phases that need to be completed.
    The bill has been passed by the parliament right now. It has to be passed by at least half of the state assemblies. Once that done, president will have to give his assent to the bill after which GST council would be set up.

    The GST council would work out the laws guiding the GST roll out and implementation. Tax rates will have to be fixed. GST laws thus formulated needs to be passed by the parliament. Individual states then formulate their GST laws. All these implementations are later need to be tested.

    A clear picture will emerge only after the completion of all those phases.

    Live....and Let Live...!

  • #574384
    With the GST Central government get CGST and the respective State government get SGST and let the Inter-State GST will get moderation to balance the two, enable us to get the inflation flow uniformly in our country.

    Let our prayer that GST should bring living standards and so the prosperity to common man.

    Still being in TN what will be our government's reaction to it and how far it will be implemented has to see in future.

    Nice to be in ISC and feel the difference.

  • #574387
    As a tax payer, I don't think that Goods and Service tax will change the way we buy commodities or cause any drastic decrease in the prices. It is indeed a good move from the government's side to curb inflation or control the ever rising prices of various commodities that we require in our day to day life. Does everyone buying everything check the bills to see how much tax they have paid, if the price of the things they had bought seemed to be decreased and if they get to buy more or get things for a lesser price it would indeed make them happy. But what if the manufacturer had started to increase the price of the items, keeping the GST system in mind, then we will have to pay more or less the same money for the things we need. for example the manufacturer currently charges Rs.100 for a commodity, it moves through the resellers who pay various indirect charges and we, as customers buy the product at Rs.150. However when the new tax system has been amended the manufacturer cunningly increased the initial price of the commodity won't we end up paying more or less the same price. then who would benefit more from the new tax system, multinational companies, retail giants or common man.

  • #574388
    The GST will definitely bring down the prices from the current level. The GST has been indicated to remain at 18 percent. Combined GST may extend up to 20 to 22 percent as opposed to the current total taxation that exceeds 25 percent.
    Moreover, the India as a whole will be one market. Thus, manufacturers would be allowed to take tax credits. Hopefully, the manufacturers will pass on this benefit to the consumers.
    But, yes, the services sector is expected to become a little expensive. At present, they are charged a tax of 15 percent. After GST implementation, these taxes will go up to 18 too 22 percent depending upon the exact laws that will be formulated after the actual implementation.

    Live....and Let Live...!

  • #574408
    When we deal with the common man or in general any person earning for a living, we will have to consider three factors i.e, income,direct expenditure,indirect effects of economy.Whether he or she is selling something, or manufacturing something, or providing a service - GST will be applicable to them. GST will affect a business on the customer side who will now ask for an invoice, because they need the credit of GST i.e the amount to be payed to them after applying GST.Business expenses (such as transportation, contracts etc) will now be eligible for set-off against their output taxes and an advantage will be that instead of dealing with a hundred tax offices, they will need to deal only with two tax departments.Coming to expenses,there will be a single tax for all transactions and daily activities like eating out,watching movies etc.Price rise or fall will depend largely on the rate of GST in this event.Coming to indirect effects of the economy,since everything will become transparent when it comes to taxes it will automatically clear out corruption and black money.Cheating on taxes and eating tax by various departments in the supply chain will become automatically impossible,hence paving the way for a cleaner economy.It will be like an RTI in the economy sector with each invoice acting as proof of sale on record.
    "If things go wrong, don’t go with them"

  • #574418
    #574388, Our service sector is contributing about 55-60 percent to our GDP and the remaining is from agriculture and industry. If cost of services increases, why can't we say that overall inflation will also increase. Similarly, what is the guarantee that manufacturers will pass on the tax benefits to the final consumer. Even though Congress is asking to cap the GST rate at 18 percent, different states are demanding that the rate should be fixed anything above 20 percent, otherwise they will lose their revenues. If Center goes with the opinion of different states, the inflation will be skyrocketed because of GST.

  • #574420
    Now let us consider some projected impact of GST on the common man -
    1. Phone bills to go expensive - Presently service tax @ 15% is charged increasing a bill of Rs. 1000 to Rs. 1150. With GST @ 18%, it will become Rs. 1180.
    2. Buying phones to go expensive - Presently, an imported phone handset costing Rs. 10,000 is sold at Rs.11,280 taking into account VAT @ 12.8%. After GST @ 18%, it will be available at Rs. 11,800.
    3. LED TV to go cheaper - Presently a LED TV worth Rs. 20,000 is sold a Rs. 24,900 after adding taxes @ 24.5%. However after GST @ 18%, the same will be available at Rs. 23,600.
    Let us wait and watch.
    The trader's nightmare may be the different SGST laws in different states.
    Also, the GST will not apply in the cases of petroleum products and alcoholic drinks though it will apply in the case of tobacco products.
    Shiv Sena has already protested saying that the GST bill will make Mumbai a pauper.
    The Government's interest is lying in broadening the tax net, not making the products cheaper.

    Let us encourage each other in sharing knowledge.

  • #574430
    My stand that GST will not benefit common man ..continues.
    After introductory entry to the discussion on GST, I have seen the arguments of other participants. Most of them appear to have fallen for the high pitched rosy picture propaganda by interested parties mainly the big corporate and the ruling party.
    My simple question to these naive participants is: Does any government simply give away the revenue generated by taxes without compensating them in some other way?
    If the government wants the price to come down for the common man, they could have easily reduced existing tax rates. But what we have seen till now is every government increased the taxes and even added cess and surcharges over and above all these. So the intention of the government is not that much pristine pure as to reduce the burden of common man.
    That also from a government and party that did not care to reduce the price of petrol and diesel evn after the international prices plummeted to lowest levels. Still you think the interest and impatience this government(or earlier the UPA government) showed on the speedy implementation of GST.
    GST, fo common man, is going to be a sharp knife hidden under a shining silk cloth.

    Let us keep faith on ourselves and work sincerely, not leave everything to fate.

  • #574433
    The view of Piyush (#574230) that "..will be beneficial for only business houses and ease in maintaining and controlling the tax records.. is exactly in line with my view on the new GST proposed.
    Bhuvaneswara Rao Nalla (#574241) also expresses some similar views which I also have in a different dimension. He scores my appreciation when he echoes my view and fear that "...GST is not a progressive tax as "it will affect the same way for both rich and poor" That is there will not be any exemptions or reduction in rates based on value or cost.
    Jith(#574387) has a wonderful point for his side justification, which I also have and concur with him.." what if the manufacturer had started to increase the price of the items, keeping the GST system in mind,"
    Many members go with a notion that GST will be capped at 18%. Please know that the real nuts and bolts have not yet worked out. The BJP government has not exactly agreed for the 18% cap. What will happen if the revenue of the government goes down? The government will increase the rates and amend constitution(if they have the needed majority) or implement some new taxes. Again the common man will only suffer.

    Let us keep faith on ourselves and work sincerely, not leave everything to fate.

  • #574435
    In my second response, I am going to discuss the rationale behind GST. Presently, the Constitution of India empowers the Central Government to levy excise duty on manufacturing and service tax on the supply of services. Further, it empowers the State Governments to levy sales tax or VAT on the sale of goods. This division of fiscal powers has led to a multiplicity of indirect taxes in the country. In addition, Central Sales Tax is levied on inter-State sale of goods by the Central Government, but collected and retained by the exporting States. Moreover, many States levy entry tax on the entry of goods in local areas. This multiplicity of taxes at the State and Central levels has resulted in a complex indirect tax structure in the country that is ridden with hidden costs for the trade and industry. Firstly, there is no uniformity of tax rates and structure across States. Secondly, there is cascading of taxes due to tax levied on tax. No credit of excise duty and service tax paid at the stage of manufacture is available to the traders while paying the State level sales tax or VAT, and vice versa.

    Furthermore, no credit of State taxes paid in one State can be availed in other States. So, the prices of goods and services get artificially inflated. The introduction of GST would mark a clear departure from the scheme of distribution of fiscal powers envisaged in the Constitution. The proposed dual GST envisages taxation of the same taxable event, i.e., supply of goods and services, simultaneously by both the Centre and the States. Therefore, both Centre and States will be empowered to levy GST across the value chain from the stage of manufacture till consumption. The credit of GST paid on inputs at every stage of value addition would be available for the discharge of GST liability on the output, thereby ensuring GST is charged only on the component of value addition at every stage. This would ensure that there would be no tax levied on tax in India. GST will also simplify and harmonise the indirect tax regime. It is expected to reduce cost of production and inflation in the economy, thereby making the Indian trade and industry more competitive. It is also expected by the experts that introduction of GST will bring a common Indian market and contribute significantly to the growth of the country's economy. Furthermore, GST will broaden the tax base, and result in better tax compliance due to a strong IT infrastructure.

    “Whenever I feel the need to exercise, I lie down until it goes away.” - Paul Terry

  • #574436
    I concur with Venkiteswaran sir's view that no Government will give away its tax revenue without compensating it in some other way. So, Government, Corporate MPs and Industry heavy weights are players in GST and common man is a mere spectator. Players will get money for playing the game and spectators will spend money for watching the game.
    Till now Government was blaming Raghuram Rajan for hindering the GDP growth by keeping the interest rates high to control inflation. But after passing the GST bill, suddenly Government started concurring with Rajan's view and it constituted a Monetary Policy Committee to keep the inflation target at 4 percent. This sudden reversal of Government's view itself shows that inflation is going to rise because of GST and the Government knows that if inflation is not checked, it will face the brunt in the coming general elections.

  • #574446
    I would maintain that there would be some respite for the common man. I am not totally in a belief of the picture being painted by the government. It cannot be totally true as the central government will need to compensate for the revenue losses suffered by the state governments. But, I would assume it would be a mixed bag of effects for the commoner.

    GST is aimed at bringing a unified taxation and expects a GDP growth of at least 2 percent with the implementation.

    Readymade garments and LED TVs can be expected to get cheaper. Readymade garments are likely to see a drop of 0.5 percent in taxes. In the case of LED TVs, Make In India campaign has been attempting to keep GST lower. The taxes that are currently at 24.5 percent would come down to 18 percent.

    There will be a price similarity in the case of cars all over the country no matter whether the state concerned is a manufacturer or not. A car that costs Rs. 5 lakhs actually makes you pay around Rs. 6.3 lakhs because of the excise duty imposed on it. With GST implementation, you should be saving at least Rs. 35000.
    The online purchase would be easier. But may make the e-commerce sites to cut down on the free offers and discounts offered.
    Yes, there are a few sectors that would get expensive, Buying jewellery, eating out or buying smartphones is expected to get costlier.
    I would maintain that there involve certain benefits of GST to the common man. You cannot expect all costs to go down in one shot. There needs to be some compensation, right?

    Live....and Let Live...!

  • #574454
    I concur with Buvaneswara Rao Nalla's view on its political impact especially with BJP which is for some month back blasted Raguram Rajan's view but after its passing with support of all parties (except exemption AIADMK), now it takes u turn and accepting the RBI's governor views that GST will have impact on common's man expenditure thereby inflation.

    So we should only pray that it should go like any other political gimmicks but surely should serve common man as per the slogan oneindiaone.

    Nice to be in ISC and feel the difference.

  • #574463
    Now, let us discuss the taxes which will be subsumed by GST:-

    The following Central Taxes will be subsumed:-
    (i) Central Excise Duty
    (ii) Duties of Excise (medicinal and toilet preparations)
    (iii)Additional Duties of Excise (goods of special importance)
    (iv) Additional Duties of Excise (textiles and textile products)
    (v) Additional Duties of Customs (known as CVD)
    (vi) Special Additional Duty of Customs (SAD)
    (vii) Service Tax
    (viii) Cesses and surcharges on goods and services

    The following State Taxes will be subsumed:-
    (a) State VAT
    (b) Central Sales Tax
    (c) Purchase Tax
    (d) Luxury Tax
    (e) Entry Tax
    (f) Entertainment Tax
    (g) Taxes on advertisements
    (h) Taxes on lotteries, betting and gambling
    (i) State cesses and surcharges

    Following won't come under the purview of GST:-
    (a) Petroleum products
    (b) Entertainment tax levied by local bodies
    (c) Tax on alcohol
    (d) Stamp duty, customs duty
    (e)Tax on consumption of electricity

    My next response will deal with impact of GST on common people of India.

    “Whenever I feel the need to exercise, I lie down until it goes away.” - Paul Terry

  • #574467
    It has to be noted that there will be a dual system of administration of GST.
    The Central GST (CGST) will be levied by Centre and State GST (SGST) will be levied by the respective states but only in respect of on all the transactions within the state concerned. In the case of interstate supply, only the Centre will levy and collect IGST. For SGST, the state commercial departments will be the administrative authority and for CGST and IGST, the CBSE will take care.
    Also, contrary to the popular belief that the GST will have a uniform rate say 18%, it is likely to have a three tier rate structure i.e. standard rate, lower rate for essential items and a higher rate for luxury items.

    Let us encourage each other in sharing knowledge.

  • #574570
    For those, who are supporting that GST will benefit the common man, must understand one thing. When crude oil prices got reduced, Government didn't allow its revenues to be reduced and it increased the excise duty rates continuously. Out of Rs. 62 that we are paying now for petrol, around Rs. 21.5 goes as excise duty and around Rs. 13 goes as VAT. You can understand how much percentage of tax we are paying for these products. Since petrol and diesel are golden geese for Governments, they didn't bring those items under GST. But they brought other petroleum products like kerosene and LPG under GST because they can reduce the subsidy burden on these products. After GST is implemented, only little amount of subsidy will be provided for each liter of kerosene or for each LPG cylinder. As this subsidy will be a very small amount, it will be easy for the Government to decontrol the prices of these products also.

  • #574586
    Members of RS acted for this bill is really historic including AIADMK who have walked out could be taken as a positive instead of negative voting which would have spoiled the bill to approve. Though the members acted according to their party's wish, but still did not know how this will affect economic and political arena. As Petroleum and electricity has not been included make the people think it is only for half of it. Also people felt that it is the kind of centralization which is against the decentralization powers delegation to states with the development of nation and also some have a fear of the kind of action in future like BRexit happened recently. People would not have thought like this if BRexit did not happen recently.

    The kind of centralization feeling only we can see, when Modi was CM, he was against the bill and when he became PM he favoured it and make opposite political parties to debate that even Modi has taken double stand between the two governments that is UPA and NDA. But we can only see it from the point of view of decentralization viz centralization. But surely this will help the corporate and for this we had a good example closure of Nokia in TN is said as additional tax burden and now it will help the corporate to do easy business and in turn it may help the common people to have employment opportunities. Those are keenly watching TN politics would remember the huge hue and cry when the industry is closed and there are about 5000 people out of job and even some political parties wanted union activities in these industries to have security in jobs but could not help.

    We should also see how this great idea of GST will have an impactof implementing and have a feeling of tough in working out w.e.f April 2017. Apart from electricity and petroleum, even alcohol is out of GST and hence states working on ban on alcohol will have an impact. Now the feeling of additional levies or exemptions may be demanded by states like Kerala and TN.

    But one major advantage is, checkpost in cities may be removed and checkposts in state borders may not have a entry tax will have greater advantage for transporters of goods and services but still the remaining risk may be there but may not be effective.
    So any new thing may take its own time to implement crossing all the barriers in implementing and hope this will be implemented smoothly without many damages to common public.

    Nice to be in ISC and feel the difference.

  • #574588
    With my last response I shall see members may turn their view from opposition to support because it is about to pass in LS also today and there would not be much problem as every party will vote except AIADMK and if there is no use for common man I doubt these many parties will not support. Even AIADMK is walking out with a dilemma only and not sure that is a problem.

    When these many years every party is behind the GST bill (with its slogan one nation, one tax one market) and only BJP has opposed and now BJP is very much wanted the bill to be passed and hence we may certainly sure that it is useful to common man. I have given example also about TN tax for the closure of Nokia while it is operative well in other states. Hence by helping corporate(#574433) it will surely help the common man too.

    Nice to be in ISC and feel the difference.

  • #574612
    Saroja ma'am, Nokia's closure is because of TN Government's claim that Nokia was selling the handsets in domestic market rather than exporting them and was not paying the tax. Even if GST is implemented, such type of legal issues can't be avoided.
    Congress is bound to support the GST Bill because it was during UPA regine that the GST Bill got a shape. So, BJP will obviously blame Congress if it didn't support their own bill. Even the Bill meant to raise the salaries of MPs also gets full support from all the parties. Does that mean the Salary Raise Bill will be useful to common man?

    In one of my earlier responses, even I have said that the only useful thing that I could see from GST Bill is the ease of doing business, which can generate more employment. Merely, generating more employment itself is not sufficient to be beneficial to the common man. If companies get more profits because of GST, there is a chance that they will use that money for automation, which in turn can reduce employment.

  • #574629
    Now, let us discuss the impact of GST on common man of India. After lot of introspection, I have come to the conclusion that GST is a mixed bag.

    Advantages of GST:
    1. Under the GST regime the taxes would be collected at the consumption. It would automatically ensure transparency. This kind of transparency shall definitely prevent Governments from randomly increasing the taxes.
    2. After the barriers between the states are eliminated, consumers would no longer need to pay for "tax over tax", which is common across India when goods move from one state to another.
    3. Experts believe that implementation of GST would boost demand and supply of goods, which would aid the growth of economy. This growth would eventually generate more employment.
    4. Ready-made clothes and LED TV will become less expensive under GST regime.
    5. Cars will become cheaper. With similar prices under non-manufacturing and manufacturing states, cars will become cheaper in some states.

    Disadvantages of GST:
    Prima Facie, the following disadvantages for common man are envisaged.
    1. Dining out will be more expensive. The restaurant will become more expensive in the GST regime, because the states would opt for higher rates.
    2. Drinking and smoking will be more expensive.
    3. Mobile Bills will go up : Since the states will be able to decide the service tax, there is a possibility of escalation of mobile phone bills. Now 15% tax is levied; however when GST regime will come into force, a mobile-user may have to shell out 18 percent on his/her mobile bill.
    4. Jewelries will become costlier. Compared to present 2% tax on jewelries, after the GST regime, 6% tax will be imposed on jewelries.
    5. On-line/ E-commerce purchasing will be costlier: Online purchase of electronic goods, shoes and bags will become more expensive under the GST regime.

    “Whenever I feel the need to exercise, I lie down until it goes away.” - Paul Terry

  • #574632
    I would wish to conclude my views in support of the new GST bill with a view that whether it would be much beneficial for the common man or not, the new bill would streamline the current tax structure. It will be an effective means of having a seamless and streamlined national market.

    The tax barriers that exist with the current system between different states and between and the centre would be done away with. GST will be levied at the destination point alone as against various points as has been the case now. The implementation will help maintain a corruption free ( hopefully) transparent taxation system.

    The price of commodities is expected to come down as the retailers will be allowed to take CENVAT credits.

    Live....and Let Live...!

  • #574655
    I would like to conclude with my comments saying that while drafting the original GST Bill, the Government should act like a welfare state rather than intending to maximize its revenues. It should not bow down to the pressures exerted by different states and other pressure groups. It should take into account the short term, medium term and long term effects of GST on common man and decide the GST rate accordingly. It is the GST rate, which will decide the fate of our country in future.

  • #574680
    The 'nuts and bolts' or the full details of the new GST will be known later. Hence we cannot discuss on the specifics. As things stand Parliament has passed the constitution amendment bill to facilitate framing of rules and regulations for actual implementation of GST. Hence what we can now discuss upon is the rationale logic and purpose and expectations thereon. I am still giving my views on that basis only.
    My inference is this GST Bill or change to the new system is an imperative for the government or ruling party. The reason for the impatience to implement the same is because of compulsions arising out of direct or indirect pressure from external interests and internal pressure groups which only a government can feel where it hurts. That is why the UPA government brought this bill first , and the opposition including BJP did not support. Now the roles are reversed and BJP government wanted to speed up but opposition was opposing. At last a deal is reached or some mutual accommodation.
    So it is very clear that the aim of GST is not common man's interest in their priority, but some other factors.

    Let us keep faith on ourselves and work sincerely, not leave everything to fate.

  • #574681
    Why I feel almost adamantly that the GST is not going to be beneficial for common man or GST is going to be a retrograde in social conscience also is due to the following reasons:
    GST is envisaged to be a common and uniform rate taxation across all goods and services without any discrimination to category, purpose or origin. It is destination taxation. All other intermediary level players will be able to get the tax paid by them offset from the tax their buyer pay them. So this does not affect them anyway. It is the last consumer or buyer who has to ber the burden of tax. Yes there can be slight reduction in the total tax component on certain manufactured products because of the subsuming of Excise duty. However it has to be really seen if the big corporate are going to pass on the benefit to customer or they will be keep in the profit margin more or les same.
    We should know that at present the rates are not uniform. The essential products and eservices are taxed less and luxury goods are taxed at higher rates. But GST will be taxing all goods and services (except liquor) at same uniform rates. So luxury goods and services will be costing less and essentials and basic necessities will cost more.
    Will that benefit common man? No,no for sure. As a gimmick the government may keep rates a bit low and corporate may also keep their profit margin a tad less, but in due course, common man will start feeling the real punch.

    Let us keep faith on ourselves and work sincerely, not leave everything to fate.

  • #574687
    In the concluding part of my argument, I would like to point out the fact that the GST Bill has still a long way to go. It is now required to be passed by Lok Sabha. Thereafter, the GST Bill will be taken up by the Legislative Assemblies of the states. Considering the number of political parties in India and the innumerable political equations among them, the process may take some more time even now. GST Bill may also undergo some changes.

    Having said this, I sincerely feel that the new GST regime would not only benefit the entrepreneurs and businessmen, but also common people of India by simplification of tax structure, by bringing transparency, by ending the scope of tax disputes between/among states and creating more employment. However, the connoisseurs of cigarettes and liquors (like me) won't get any relief in the new GST regime! Taking into consideration all facts, I whole-heartedly welcome the most important tax reform in our country after independence.

    I wish all the very best to all other participants of this GD very best. Thank you, all!

    “Whenever I feel the need to exercise, I lie down until it goes away.” - Paul Terry

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