One Year Of GST: How The Major Tax Reform Has Impacted You

Goods and Services Tax (GST), which was rolled out on July 1 last year, will complete a year on Sunday. The uniform indirect tax regime, which was in the offing for several years, was eventually rolled out last year at midnight hour in the intervening night of June 30 and July 1. A year has passed and several items that were initially added in the GST regime are now no longer a part of it. Many items that were in the lower tax bracket now attract higher taxes under GST..Items under GST are taxed in five tax brackets: zero per cent, five per cent, 12 per cent, 18 per cent and 28 per cent. Some items such as petrol, diesel and liquor are, in fact, not included in GST..The common citizen is expected to gain from GST regime in the time to come on account of anti-profiteering provisions of the landmark legislation, say experts..How has it impacted you?.From setting up of systems to implement the new indirect tax regime to formation of National Anti-Profiteering Authority, the past one year has marked many important milestones for GST. .One of the main objectives of GST was to bring all indirect taxes and services under the umbrella of one overarching integrated tax. That purpose has seemingly been met, say experts. (Also Read: One Year of GST - What Finance Minister Arun Jaitley Has To Say)."GST has also streamlined tax compliance," said Aditya Kedia, managing director, Transcon Developers. "The main aim of GST was to replace multiple indirect taxes with one single tax - it has further streamlined the tax compliance and diminished the room for double taxation," he said.."Under GST, same goods and services are taxed at same rates in all parts of the country and, hence, it has led to availability of products to customers everywhere at the same prices. It has also led to more competitive environment which is beneficial for the common man," said Vishal Raheja, DGM GST, Taxmann.."Anti-profiteering provisions have at least set the tone for reduction of prices. Hence, the common man, at some point of time, will gain due to the reduction in taxes. Further, the taxes now are fairly and completely visible on the invoice and hence the common man knows their brunt," said Abhishek A Rastogi, Partner, Khaitan & Co..The formation of National Anti-Profiteering Authority has ensured that benefits of price reduction are passed on to the consumers. The purpose of setting up this body is to determine whether the reduction in tax rates or benefit of input tax credit is being passed on to the recipient by way of commensurate reduction in prices or not. Input tax credit helps manufactures claim credit on tax paid already..Reduced rate of GST on low-cost housing under various schemes has also led to reduction in the cost of housing. "There has been an increase in demand of said units by the common man," said Parag Mehta, Partner, N.A. Shah Associates LLP..How has GST impacted small businesses? Small businesses now have to deal with only one department because all taxes have been subsumed under GST. This has reduced the level of compliance for small business. Their compliance cost is also saved..Under GST, it is easy to take registration in different states directly through online portal from any place without any need to visit the department..The availability of input tax credit has resulted in increased margins for small businesses. Input tax credit helps manufactures save on tax that they pay on output because they have already paid the same on their purchases. So while paying tax on output, they can claim credit for the tax they paid on inputs..The International Monetary Fund (IMF), however, said recently that India should further streamline and simplify GST..It will possibly take some more time to fully make the best use of this uniform tax regime.

One Year Of GST: How The Major Tax Reform Has Impacted You

NDTV Profit

NDTV Profit

Follow Us

DISCOVER US FASTER

DOWNLOAD THE APP