All You Need To Know About GST

GST or Goods and Services Tax, is being discussed everywhere these days. What everyone is talking about is the system of replacing the 20 different kinds of indirect taxes (Service Tax, excise duty, customs duty, VAT, etc) with one single type of tax. This is all set to be implemented in India from 1st July 2017. Because of the change in tax rates, prices of a lot of products will be revised. So, implementation of GST will have a positive as well as a negative impact in our lives.

Before it gets implemented, it is important to know what GST is and how it will affect our lives.  We have compiled some interesting points on GST so you don’t get bored with “another GST story”.

What is GST?

In an initiative to integrate the various taxes levied in the country, a single tax shall now be levied on all products & services in India. In other words, instead of paying different taxes like VAT and Service Tax or Entertainment Tax, one shall pay only 1 type of tax i.e. GST.

All goods and services will be taxed at the rates of 0%, 5%, 12%, 18% or 28%. Considering these changes in the taxation system, prices of products like footwear below Rs. 500, garments, and mobile phones could become cheaper. On the other hand, items like TVs and small cars could become costlier. This tax will be implemented from 1st July, 2017 and is expected to impact India’s economy as a whole.

Why GST?

People who are Economics enthusiasts should know that this tax is collected on value-added on goods and services at each stage of sale or purchase in the supply chain. So, it will have various positive impacts because of which the government decided to imply it.

• It will positively affect the GDP of our country, increasing it by 2%.
• GST is also likely to improve tax collections and boost India’s economic development by breaking tax barriers between states and integrating India through a  uniform tax rate.
• The most important aspect is that GST will help to build a transparent and corruption-free tax administration.
• It will help in curbing red tapism, hoarding and various other malpractices.
• It will be the most useful for the common man as prices of most necessary goods will go down making our lives easier.

GST’s Impact on Students

GST will affect everyone including producers, manufacturers and retailers. But it’s important for us to know how GST affects us as students. The good news is that services provided by educational institutes, tuition fees, books, and accommodation are not subject to GST. Prices of chain restaurants will be the same or lower.

However, the bad news is that in a short span of time, after the implementation of GST, prices of phones, laptops, and computers will definitely hike. The prices of clothes, lipsticks, nail polishes and other accessories will also rise. Tax defaulters and people with black money will be affected the most with the implementation of GST.

We hope this article helped you in understanding the concept of GST better. Cheers and keep studying with Meritnation!