Is GST beneficial for the common man?

Is GST beneficial for the common man?

Plus :-

  • Basic food items prices aren’t increased. There is no tax on milk, pulses, wheat and rice.
  • Prices of most of the daily essentials used by middle class people remain unchanged and prices of some daily essentials like soaps, LED bulbs have reduced.
  • Till now there was a luxury tax on spending money on ICUs and incubators. With GST, this tax is evaded.
  • Bicycles and sports equipment prices will be reduced. This is a plus for all because of the growing interest in sports.

Minus :-

  • As service tax is increased to 18%, banking, telecom services, credit cards, chit funds, insurance premiums etc will become costlier.
  • Mobile phones prices have increased. Till now, tax on mobile phones is just 6%, with GDP it was increased to 18%.
  • Bikes and cars prices increased.
  • Tax on clothes is increased. As consumerism has increased, this is a minus for all, especially for middle classes.
  • Cosmetics will become costlier.
  • Gold rate will be slightly increased.

What is GST :-

  • ‘Goods & Services Tax’ (GST) is the biggest tax reform in India till now. GST replaces all the indirect taxes in the country.
  • At present there are different tax rates in different states. With GST, tax rates will be equal through out the country.
  • All the indirect taxes such as Excise tax, sales tax, service tax etc. will be replaced by GST.
  • GST also eliminates double taxation. Till now, manufacturers have to pay tax on the goods they manufactured. For example, the maker of wooden toys had to pay tax on the rate of the toy, that he is going to sell. But with GST, he has to pay tax only on the value he added, that means he bought wood from another manufacturer and he added value to it by transforming the wood into toys. He will not pay tax on the wood, because tax on wood was already paid by the wood manufacturer.
  • GST is going to be implemented from July 1st, 2017.
  • A four-tier GST tax structure of 5%, 12%, 18% & 28% will be implemented based on the type of products. For essential goods like food, GST will be 5%, and for luxury goods, GST will be 28%.
  • GST is an international tax regime. More than 160 countries already implemented GST.

Conclusion :-

GST rates are beneficial to middle classes and below middle classes. Upper middle classes and upper classes will pay more for the goods. For example, prices of footwear worth below Rs. 500/- remain unchanged, and footwear worth more than Rs. 500/- attract 5% additional tax. Though some of the goods prices have increased, in the long-run GST will be beneficial to all, as it eliminates tax complexities, encourages tax payments and increases GDP.

Afterwords :- Do you think GST is beneficial for the common man? Express your thoughts in the comment section below.


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11 comments

  1. I agree with your point but a common business who did’nt know what is GST will find it difficult to understand it. Now, he has to hire a accountant to show gst on his product, so we can say it is not benficial to small businessmen.

  2. 18% GST on educational courses is it reasonable. I took a loan of4 lacs for a cad course from a bank snd i paid almost Rs60000(sixty thousand) as GST.Is it justifiable by any standards?

  3. I don’t have much knowledge regarding functionality of the GST. I had only came to know that prices have increased due to it. So what is the current benefit of it to common small business carriers, I think our government must focus upon the current livelihood scenario also regardless of future innovations in India.

  4. GST means goods and service tax as india is a federal country where there is lot of complications due to complex indirect tax system of india there are multiple indirect taxes which people have to pay like VAT, CSAT,Octoria duty etc so it makes diffcult for people to do business across different states but now after GST there is one tax everywhere in nation so the people have to pay only one tax so the corruption will be removed to large extent and due to input tax credit claim and antiproftering law common man is benefited and due to gst the new gst accounting requirement government aims to create 2 lakhs jobs which will help in unemployment though for short term GST is creating problem for common men but in medium and long run it will be beneficial for common man and economic growth for country will improve

  5. Let us suppose you are a manufacturer….You have to buy certain raw material for manufacturing…You paid RS.500 as input tax on this raw material..now you have to sale the goods that you have manufactured..and you have to pay RS.700 as a output tax…but since you have paid RS.500 as a input tax…you have to pay only RS.200 as a output tax this time..(700 – 500)..This is called as tax input credit..
    Before GST it was allowed within the certain state only i.e. if you bought a raw material in Kerala and selling the manufactured goods in Kerala.then only input tax credit was permitted..but due to GST it can be availed all over the country

  6. what is tax input credit plz can u expln in detail i search on google bt not got satisfactory answer ty in advance

    1. First of all, “input tax” means tax you pay to the govt for the goods you buy. “Output tax” means tax you pay to the govt for the goods you sell. This “output tax” will be added to price of the product and hence will be paid by consumers.

      And now, let’s see what is the meaning of “input tax credit”…

      For example, Fathima manufacture dresses. She needs to pay Rs.50 tax to government on each dress she sells.

      She bought fabric from Anusha. Anusha paid tax Rs.40 to government on the fabric she sold.

      So, now Fathima pays only tax Rs.10 to government and informs govt about Rs.40 that Anusha paid on fabric. Government checks the receipts. And then, on paper the total tax Fathima paid is written as Rs.50/-. This is the concept of “Input Tax Credit”. That means you can claim the “credit” of “Input tax” that is paid by your supplier of raw goods.

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