" Goods and Services Tax - GST A Boon or Bane for Indian citizens".

Tuesday, January 16, 2018

During my vacation to India last June 23rd ,the moment I landed at the airport I could hear people around whispering the term GST… GST… GST….Initially I thought it is one branded tea name,now I laugh at my ignorance.I asked my Mom about it and she was also unaware of it.My relatives and friends were all confused about its impact and were planning to buy all electronic items and household goods well before the implementation of GST.When asked to them about it all they knew was it is one tax which is to be implemented by the government with effect from the 1st of July apart from that they knew nothing.All I could observe is all were taking precautionary measures before the implementation of new alien in the name of GST.

What is GST ??? Is it really Scary ?

In one usual conversation with my grandfather I asked him what GST is?he started to give his reply in usual funny way.

He asked me how much I Love him?

I said I Love him a lot.

He said tell me in %

I said obviously 100%.

He said but from next month it will be just 72%.

I asked him in Chaos why?

He said because of 28% GST on luxury items.

I was totally confused,I didn’t feel like laughing too hearing his reply.I just asked him if it is that bad why the government is implementing it when majority of people are opposing this idea of GST.Then he started to explain me in a way I could understand .

He said imagine tomorrow is your birthday and your mom gave one packet of chocolate to be distributed in school.While on your way to school you met your classmate Rahul with his mom and you gave his mother and him one chocolate each and while entering your school seeing you in color dress the watchman wished you and you were forced to give him one chocolate too .Later in school teacher wished you and asked you to distribute chocolates to everyone in the class and Rahul got his second share of chocolate and meanwhile your close friend Madhav didn’t receive the chocolate as he was absent.Now my grandpa started correlating taxes in india with the story.

He said the chocolate packet is like the business you run and the chocolate given to your friends mother is like the local tax which we pay, the chocolate given to watchman is like the entry tax and Rahul’s share of chocolate is like paying the surcharge.This is the condition of tax payment in India so far .There are so many indirect taxes in India like sales tax,service tax ,entertainment tax,VAT(Value added Tax) ,like this there are many taxes which are not directly under control of the government.So,inorder to directly bring all taxes under one control government has planned to introduce GST that is Goods and Service Tax in the motto of implementing One Tax for One Nation.To make me understand better he started explaining me again correlating with the story.He said imagine in the story if the school implements a new rule that chocolate packet should be handed over to your principal who will have full control in evenly distributing it among your classmates,by this way all will be equally getting their share.This is what GST implementation is all about .

Around 17 Indirect Taxes will be implemented under one common Tax there by benefiting the consumers.But unfortunately since Madhav was absent he was unable to enjoy the benefit,likewise may be few not beneficial from it but many are expected to gain from it.The explanation from my grandpa made me attracted more towards GST and I started researching about in google and ended up in finding few point for my knowledge.

On July 2017 ,the much awaited biggest tax reform of Indian economy the GST or GOODS and SERVICES TAX was implemented. Prior to India it has been implemented in around 160 countries in some form or other.The rate of GST normally ranges from 15-20%.However it may differ to a higher or lower side in some of the countries. But in India instead of single 18% rate as envisaged earlier multi-bracket GST rates of 5%,12%,18% and 28% were introduced making the process more complicated rather simple.

The rates of GST play a crucial role in its successful implementation.Its been almost 6 months and our government is still struggling to rationalise the rate structure.

The list of advantages expected from the GST

1.A unified tax system replacing bundle of Indirect Taxes

2.Corruption free India will emerge when circulation of black money is blocked.

3.The low prices will lead to increase in demand of goods which will lead to increase in supply there by leading to increase in production of goods.

But these advantages will be possible only when the GST is implemented in long run and actual benefit of it is passed on to the final consumers.

However I felt that GST could be boon to our Indian economy by ignoring the negative impact and start focusing on the positive impact of it ,

In conclusion I would like to suggest few point which my uncle said while I was asking his opinion about GST.

His point of view is,he said GST will have its positive impact if it is implemented on petroleum products.I wondered how it will have an impact.His answer made me think twice.He said even if the maximum percentage of GST is implemented on petroleum products we will get petroleum at a very cheap rate as compared to present state and this will have direct impact on the price of goods like vegetables and people will enjoy the benefits and will start welcoming the change.

When I asked him when there is an easy solution for this then why not government is implementing .He said Government if it agrees to implement on this then it needs to expand its infrastructure to match it.Looking at me in confusion he started explaining me in detail he said when he petrol price reduces every one would buy car or other comfortable means which requires a wider road .When the fuel prices reduces even the airfare becomes cheaper which increasing the % of people flying so inorder to meet it more airports are needed .Like this each and everything has its impact on the other in one or other way.After hearing I really felt what all a government needs to consider before implementing a new reform in a country .Its the responsibility of citizens like us to help our government by giving our full co-operation and support to such new changes instead of criticizing and bothering about the negative impact.So,I I definitely believe that though GST now seems to be a threat or bane to Indian economy will one day be a BOON to our Indian economy with our support and few positive changes from the government.

Lets believe and wish that the ONE NATION ONE TAX Motto is a future boon to our Indian Economy.


Sanjeev Ramprasad
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