GST, the new tax structure is affecting the price of several products be it daily use or luxury items. There will be some products whose price is going to get higher, heaper and some will remain at their same prices. It is because of the new tax structural slab introduced by the GST Council which include various items in between five, twelve, eighteen, and twenty-eight percent. Items that were previously sold at higher rates are now sold at lesser prices and vice-versa after the implementation of GST to lower down the burden of consumers. However, there are products that are sold at same rates and are said to be tax free. Another major problem that the common business person are facing after the implementation of GST is that the calculation of GST tax which can be simplified by using GST calculator, tools and software. Let’s take a look on post-GST effect you need to know.
- Pay the Least Amount of Tax
The major impact of GST is the introduction of input tax credits that are given to the wholesalers, shopkeepers or retailers. Even the end-consumer has to pay the GST at the last point in the supply chain the input taxes that are paid at every stage of purchase or production can be availed in the later stages of value addition.
- Tax Reduction
One of the major benefits of post-GST is that there is a huge tax reduction on services and purchase of some goods. It is because of the input tax credit and the introduction of anti-profiteering clause in the GST due to which the service providers are able to pass the benefits of the post-GST to the end consumers.
- High Tax Rate on Fuel and Sin Goods
In the new tax regime, fuel and sin goods such as ATF, petrol, alcohol and wine will be sold at higher tax rate as per the decision of GST Council. Even the fattening aerate drinks have been taxed at higher rates. It is because the Government wants to reduce their usage due to health concerns of the common population of our country.
- Lower Overall Inflation
The impact of post-GST might interchange for some time according to the reserve Bank of India. The overall inflation of GST such as increase in the banking and financing services on the common people is going to come down with time. As the GST regime will take some time to implement and understand, it will reduce the burden of taxes accordingly.
- Reduced Cost of Services
The short-term inflationary effect of GST will be seen on the service sector. It is expected that the reduced cost of services due to the availability of GST credit, the prices of the services and products are more likely to lower down with time, thereby benefiting the consumers.
- Benefit to Small Businesses
Small businesses are getting the most benefited businesses after the implementation of GST. As the GST has reduced the burden of indirect and multiple taxes into a single tax regime, the small businesses are excluded from the GST tax if their annual turnover is less than seventy five lakhs. Instead, they can get registered into the composition scheme in which they have to pay the tax at a nominal prices. This will help the society to generate better revenue for the government as well as for the people.
- Revised Manufacturing Prices
There is a possibility that the manufacturers revise the manufacturing prices after few weeks to check the net impact of GST on consumers, distributors and the market of wholesalers. The effect of revised prices of the products may be positive or negative. It is, therefore, important to check whether the new taxation system is benefiting the population or hampering the country’s growth.
- Benefits to Consumers and Government
GST is not only the structural transformation for the Indian economy, but also a huge beneficial reform that has been implemented from the first of July. GST has been implemented to benefit the government and consumers in multiple ways such as ease of doing businesses, creation of a better national market and an improved tax compliance.
Wrapping Up
Post-GST implementation is thought to bring some major changes in the entire taxation system of the country including the growth and economy. That said, initially there will be troubles in understanding the new taxation regime, but as time passes, everything will be back to normal. People will become used to it and will be benefited in the long run. People who are having trouble in the GST calculation are recommended to use the specific GST calculator to know the exact output and input tax credits on their businesses.
