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  • Category: General

    What will the impact of the GST be on the Indian economy?

    Goods and services tax (GST) has become a reality from July 1. There are expectations that the tax reform will boost the Indian economy and huge shift will be seen from unorganized to organized sector. What your views on GST impact on Indian economy.
  • #602626
    The pinch of GST is yet to be experienced by the normal citizen of India as only few days has been passed and every one is trading and doing business in old style. Only difference I could find that the price rise in restaurants. Earlier for a Puri and Biryani, the bill would be somewhere 70 rupees in decent road side hotel. But yesterday I had to shell 95 rupees for the same. Moreover for a place of just six pieces of Vegetable Manchurian, the cost was 30. That means the traders and hotels are pruning the quantity so that there may not be lots of price variations in the menu they order or relish.
    K Mohan
    'Idhuvum Kadandhu Pogum "
    Even this challenging situation would ease

  • #602634
    We have to wait and see.
    My guess is initially for a year or two a little hike in the expenses may be there. Afterwards it will come down and get stabilised. However it is my guess only. Somebody questions me How, I have no answer.
    But the advantage is many business people will try to pay tax and will not try to evade the same as the procedures are very simple and they will get back the input tax.
    Once government gets more money in the form of taxes, they will try to improve the facilities to citizens and reduce the tax burden on the people.

    drrao
    always confident

  • #602637
    There are several reports are pouring through media regarding GST tax system. Initially people are saying Gold price got increased Rs.90 per gram. With service tax incurred on making charges make purchase of gold become costlier. Electronic goods showing an increase in their price due to an increase of 2% tax over previous tax. Soaps got little tax concession on their cost but detergents and washing bars costing more. Some Cars and two wheeler s cost got reduced. Cinema industry worrying as they are the major source of tax in governments income the increased taxation at producer level, production level, exhibitor level and customer level will affect the industry severely in long run. Big Hindu temples all over India worried that they have to bear heavy burden on maintaining free meals to devotees, theertha prasada vitharana, accommodation facilities to be provide for for devotees etc. Because of paying heavy taxes they loose the opportunity to improve facilities and religious activities to be conducted. State governments also worrying they loose their major tax revenue and they have to depend on everything on Central government on funds.

    Some of the statements in media have no proper explanations from experts. The States which are expertise in production will be less benefited and the states which consumes or buy more get benefited. Since South India tops in production of many consumer-able goods it is less likely to be benefited and North India which sells more of the goods get benefited is one of the thing I found in our News papers. Second thing is small shops with less turnover has no GST tax. Then will the consumer get benefited by buying goods in small shops? In News papers they are saying because of GST Corporate shops get heavily benefited and small shop owners get wiped away. Knowledgeable members about these issues please throw some light on these issues and statements.

  • #602642
    Initial confusion will vanish soon. It may take some time to see the results in the macro level. (Immediate effect for consumers is prices will become high, because traders and manufacturers will not volunteer to reduce prices).

    But by and by tax administration and compliance will be more smooth. Arbitrariness will become lesser as things will be more transparent. The rates being uniform in all states, goods movement will be faster and easier, removing traffic blocks and holding over at check posts. Things will become simpler from the complexity of multiple taxes at multiple points. These will reduce corruption. The states will also encourage GST as their revenue share is clear and straight. Traders and manufacturers will become satisfied as they get the input compensations immediately netted.

    As movement of goods becomes faster,as tax compliance and tax collection becomes better, the centre and state get better revenue, corruption becomes less overall economy will improve much.

    But as in anything the final consumer, who has already paid income tax for his income will have to again bear the full accumulated burden of GST. All others in the line get their burden reimbursed by netting.

  • #602667
    Whenever there is a change from one tax regimes to another it takes time for initial confusions to settle down. The media and markets are humming with rumours and apprehensions.

    In GST regime everything is not going to be taxed at 18%. There are so many items which are at lower rate. The interesting thing which people are not thinking in such cases is - are shopkeepers or retailers passing the benefits to the consumer or not where rates have come down.

    Everyone is talking of rates where they are increased and not where they are decreased.

    This may be a problem of monitoring or governance but retailers must cooperate the Govt otherwise the whole purpose will be lost.

    Yesterday I went to a supermarket and brought 30-32 assorted household items for Rs 1280. I observed that the rates were same as that of the last month. Only thing was they have included GST in their final rate displayed. It means they have not increased the rates. But my worry is there may be some items where rates should have come down, that has not happened. The GST in my bill was only Rs 70 which means on an average 7-8% only. So Govt is going to get only Rs 70.

    If people are interpreting Govt rules in only one direction what will happen to consumer.

    We must remember that GST has replaced all other taxes so some places it will be costlier and some places it will be cheaper. The difference is in the ease of business. The shopkeepers and retailers will have to deal only with one tax. There will be a lot of control on uninvoiced business as it will be easier for Govt agencies to catch the defaulters.

    Overall economy is poised to grow positively.

    Knowledge is power.

  • #602701
    I had purchased some product online after July 1st. The products had MRP(including all taxes) of pre-GST manufacture date. The billing showed like this MRP minus discount offered =taxable price Added GST 12%. .Then final price.

    It is actually wrong. The previous MRP was inclusive of taxes existing then. So the billing should have been as - MRP minus the then taxes= present taxable price. Add GST .Arrive sales price.
    But as the discount offered made the actual price I paid less than the previous MRP by about 14 percent, I ignored the matter for the time being.
    Most traders are resorting to this kind of billing now. The concerned departments should make public what were the tax components and their percentage on items whose price should have come down after GST. Then consumers could have found how much they inflated the prices. The traders are now making double profits. implementation.

  • #602766
    Today I purchased several items from the Super Market but I found only old prices only they are collecting. There is no GST price marking. For soaps value of Rs.114 they have reduced Rs.4. Sunflower Oil packet showing a price of Rs.99 are giving for Rs.72. Before GST also they are selling the same price. In bill also they are not showing GST and are showing surcharges on VAT 0.00. So will the business people pass on any benefit which the govt. gives on any to the customer is a question mark?


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