In India, GST is implemented as one tax system for all goods and services. This tax system is introduced as a replacement to all previous state and central government taxes and duties. This newly updated tax system is implemented in India from 1st July 2017. People want to know about the impact of this new taxation system on Indian markets. Well, it is a simplified and transparent taxation system that will provide the various benefits to consumers and customers. The previous tax and duties system was very complex but this new system will change everything and will make India a unified market.
Impact of GST system on Indian Markets:
When the GST is implemented in India, the cost and tax at various goods and services have changed. They divided these goods and services into various categories and applied the GST tax of 5 % to 28 % on it. If you also want to know about the positive and negative impacts of this system on market, here are some of the main points:
Positive impacts of GST:
GST system will be beneficial for the businesses in following ways:
- Easy to Run Business in various states: If you want to run any business in various states of India, GST will be beneficial for you. Now you do not need to pay different amounts of taxes in different states. It is one tax system for all states of India and you will get rid of various taxes and duties on your businesses.
- Fewer Tax Compliances: Before GST, there were so many taxes and duties that were implemented by state and central governments. Now they have replaced all these taxes and duties with Central GST and State GST.
- Faster Transportation of Goods: After the implementation of GST system in India, the transportation services will be improved and will be faster. If you are running any business, you will need the transport services for it and it will be better.
- The increase in Foreign Investment: With GST, India is now a unified market and the foreign investment will be increased in India. With this tax system, more foreign companies will be attracted towards India.
These are the positive impacts of GST on the Indian market. Apart from these impacts, there are some of the negative impacts of this new tax system on Indian market and businesses:
Negative impacts of GST:
- GST Rate Is Higher Than VAT: New proposed GST rates are higher than the previous VAT rates on the goods. The price of some goods and services will be increased after implementation of GST.
- Dual Control system: In this new GST system, the dual control system is introduced. According to this system, the GST is divided into two categories that were controlled by the state and central governments.
- Some Sectors Will have Negative Impact: Some of the sectors are having benefits of excise duty fee and no tax additions. After GST, such sectors will face negative impacts and will face the loss as GST tax amount.
So these are some of the negative impacts of GST. This new system will provide the benefits as well as a loss for different businesses and different sectors.