Benefits of GST:
The implementation of GST will help create a common market in India and reduce the cascading effect of tax on the cost of goods and services. It will impact tax structure, tax incidence, tax computation, credit utilization and reporting, leading to a complete overhaul of the current indirect tax system.
Issues related to GST:
GST will not be a cost to registered retailers. Therefore, there will be no hidden taxes and the cost of doing business will decline. This, in turn, will help export become more competitive. In GST system, Central GST and State GST will be charged on manufacturing costs and collected on the point of sale. This will benefit people as prices will decline, which in turn, will help companies as consumption will increase.
Few considerations in GST:
Under the Bill, alcoholic liquor for human consumption is exempted from GST. It will be up to the GST Council to decide when GST would be levied on various categories of fuel, including crude oil and petrol. The Centre will levy an additional 1% tax on the supply of goods in the course of inter-State trade, which will go to the States for two years or till when the GST Council decides. The primary reason for the Bill is to pave the way for the Centre to tax sale of goods and the states to tax provision of services. The Bill further proposes that the Central Government will possess the exclusive power to levy GST on imports and inter-state trade.
The biggest benefit will be that multiple taxes like octroi, Central Sales Tax, State Sales Tax, Entry Tax, license fees, turnover tax etc. will no longer be present and all that will be brought under the GST. Doing business now will be easier and more comfortable as various hidden taxation will not be present. It will be beneficial for Indian companies as the average tax burden on companies will decline. Reducing production costs will make exporters more competitive and aggressive.