The much awaited goods and services tax is now into enforcement in India. The talk of the town is there and now people are paying one tax for all goods and services. July first would be written in bold letters in the history of financial sector in India and this is because on this day GST was implemented. It’s been almost a week of the successful implementation of this tax but still it remained as a talk of the town. Still people are much confused about GST and are searching for it in every possible aspect. In this article we are going to sum up the pros and cons of GST in few simple points so that everyone can understand it in better way.
Pros of GST
- The best benefit of GST is that it is a unified tax system that has removed the numerous indirect taxes.
- With this the complications regarding taxes and managed would also get lowered.
- With GST the cascading effect of taxes also removed.
- Manufacturing cost of goods will be reduced hence ultimately reducing the price of the object.
- Products like fast moving consumer goods, car, etc will get cheaper due to the low manufacturing cost.
- This unified tax regime will lead to less corruption in system.
Cons of GST
- Services are likely to become expensive after the implementation of GST and this is because of the increase in service tax in the service sectors like bank, telecom, etc.
- Implication will take some time as it is a new tax and people would need time to understand it well.
- It is a consumption based tax, so with the increase in service the charges would also shoot up.
- There are high chances that seller would increase the price of their goods in order to get more margin. There are lesser chances that the consumer will get profited by it directly.
However, everything has some goods and some bad, but how it survives depend its future. It’s been only a week and there is a long time to go, let’s see how the tax affects the tax payers and how the tax service companies are going to understand the whole scenario.