How has the GST impacted the Indian Economy so far?

GST has been a revolutionary step taken by the Indian government in the year 2017. The idea is to implement GST in 29 states and 7 union territories to benefit all sections of the society. Simple accounting, fewer tax returns and very clear rules were some of the system’s attractions for manufacturers. Furthermore, the benefit of paying less for goods and services is what made consumers digest the revolutionary step. Not to forget, the GST system also promised to block revenue leakages, thereby allowing more revenue for the government.

However, no plan can be considered “successful” or “failed” without analyzing the fundamental realities.

Has the GST had the right impact? Let us first understand the GST better and then we will be equipped to analyze its impact.

GST- Briefly Explained!

Goods and Services Tax is levied on each and every stage of manufacturing along with sales of goods and services across the country. GST is charged when services and goods are consumed.

Let us know the three categories of Goods and Services Tax (GST)

Central Goods and Services Tax (CGST)

The first category we will throw light on is the Central Goods and Services Tax. As the name suggests, this tax is collected by the Central Government. The tax applies to the interstate sale of goods and services.

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State Goods and Services Tax (SGST)

This particular tax is collected by the state government. This tax applies to intrastate sales of goods and services.

Integrated Goods and Services Tax (IGST)

Integrated Goods and Services Tax is levied in case a supply of goods and services is made from one state to another. IGST is collected and shared by both the State and the Central Government.

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Delving into the impact of Goods and Services Tax (GST) on the Indian economy

Introducing, promoting and implementing “one nation, one market, one tax” has indeed been a very brave but interesting step. Did GST benefit the country? In some ways, yes. The following are the main impacts of GST that deserve some discussion.

1. Additional funds for production.

The Goods and Services Tax has considerably reduced the total tax base. This allows the saved fund to be reincorporated into the investment cycle, thus accelerating production.

2. A simple tax structure

If there is one thing that everyone in the country is unanimously grateful for after the arrival of the Goods and Services Tax (GST), it is the simplified tax structure that they have received. Yes, with GST, the Indian tax system has become less complicated than before. What benefit does a less complicated tax system offer? Well, it makes calculating taxes easier than ever. Furthermore, it gives the consumer a very clear idea of ​​the amount paid in the form of taxes when purchasing products and services. We must not lose sight of the fact that the benefit of a simplified tax system has had a substantial impact on GDP.

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3. Greater export volume

In a nutshell, the Goods and Services Tax (GST) has led to reduction in customs duties on exports. This means that production units preserve money not only when producing goods but also when shipping them. Manufacturing units across the country have been highly impressed by this two-way savings and have therefore increased the quantity of their exports.

4. We promote operations throughout the country.

GST has provided a unified tax system for the entire country, which has facilitated the process of transportation of goods across the country. This has undoubtedly boosted operations in India.

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Source: sef.edu.vn

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