How is GST beneficial for the country? How would it help to improve the country's economy?

The GST goods and service taxes is a bill that has been recently passed and it makes your tax structure easier and helps in doing away with all the extra taxes from a business.

GST helps manage your taxes easily and can throw in a lot of clarity on what you are paying for and what is the number of taxes that you are paying. It leaves out all the unnecessary taxes you have been paying along without knowing much about it. 

With GST all the taxes are paid and all the complexities are done away with. It is a consumption based tax which depends on the sale, manufacture and also the consumption of good and services at a national level. 

With the rise in Global trade, GST has almost achieved a global standard. It brings out a qualitative change in the tax system and helps redistribute the burden of taxation equitably between both manufacturing and services.

Will GST Bring about an Improvement in the Economy? Let us find out

Some of the direct benefits of GST can be listed as follows,

·         It removes bundled indirect taxes including the VAT, CST, service tax, CAD, SAD, and also the excise.

·         A simplified tax policy, a great change from the the current tax structure.

·          Doing away with the casacading effect of taxes.

·         Slashing down of manufacturing costs as the burden of taxes lowers down considerably on the factoring sector. Hence prices of consumer goods will come down.

·         The common man will be greatly benefited as they will have to pay less money.

·         Both the demand and consumption of goods increases.

·          Increase of demand leads to increase in supply, which will ultimately lead to a rise in the production of goods.

·          The black money circulation also gets controlled, especially circulated by the traders and shopkeepers will be checked thoroughly.

·         A sharp reduction in the price gap between the organized sector.

·         The warehouse/logistics costs will be controlled across both the operational and non-operational segments. The best psart of this is it will improve operational profitability by the almost 300-400 bps.

·          The 7th Pay commission will also boost demand and fund inflow, especially in the consumer durables sector. It is expected to rise during the end of this year.

The indirect tax in the country has improved the model of their supply chain and systems thanks to the multiplicity of taxes and costs involved. The total tax collection in India including both the direct and indirect is Rs. 14.6 lakh crores and from that about 34 percent of that comprises indirect taxes and with Rs. 2.8 lakh crore comes from excise and another Rs. 2.1 lakh crore comes from the service tax. 

Thus, with the implementation of GST, the entire indirect tax system in India is transformed and going in the right direction, at least as far as the economy of the country is concerned. The tax revenue expectedly will change the face of the country’s economy and will help bring at par with the other economically prosperous countries of the world.

How will the GST impact Indian capital markets?

Not many radical economic changes have impacted the Indian Economy as much as the Good and Services tax(GST) since 1947. and it plays an important role in the economy of India. GST is levied on the manufacture, sale and also the expenditure of goods and services

 The chief purpose of GST is to unify indirect taxes and create a common market. The Finance Minister of the country, Arun Jaitley says that the GST bill will revolutionize the economy of India and helps in the economic integration of India. Thus the GST also is a way to make the cumbersome tax process uniform, which is levied on goods and services across the country.

Certain Facts of GST which you should know about

Currently, the tax scenario is like this, there are multiple indirect taxes which are levied on goods and services which are a deterrent to the growth of India’s economy. 

There is not one but numerous taxes in the forms of CST, Entry tax, VAT, Excise duty, Entertainment tax, Customs duty and Stamp duty and any other have divided the Indian market. This scenario means that introduction of GST will result in economic growth. 

GST is sure to impact positively on the Indian economy. Some of the sectors of the Indian economy are more impacted upon in comparison to another sector under GST.

After the GST implementation, it has removed all the indirect taxes and formed a single common market which results in an efficiency of supply chain and an economy of scale in production It can also give leeway to improved trade and commerce.

GST will also do away with the rapid effect of taxes rooted in the cost of production of products or services and will provide the required credit throughout the value sequence. 

This will particularly minimize the expense of natural products and will raise the importance of the ‘Make in India’. The long value sequence can be found in basic products to final consumption stage with functions distributed in different states which include the FMCG, consumer resilient, pharmaceutical, vehicles and also technological innovation products which are the ones which will bear the major brunt of the GST application. 

GST will help the business to flourish in India. The expense of tax conformity and deal price will be substantially resolved with the transformation of current several taxations into single GST. So you get a tax program which is stable, clear and definitely foreseeable, it will draw both local and foreign investors in droves to India and this also means lucrative job opportunities.

Goods and services tax (GST) has started being implemented from July 1.

There are certain expectations from this tax reform that it will boost the Indian economy and a major shift will be seen from unorganized to organized sector.

However, you would expect to experience near term hiccups for the next one or two-quarters.

According to a few market experts, job creations may prove to be a problem.

Whatever the consequence the GST is said to create a major economic transformation, the effect of which will spread far and wide.