GST impact to be neutral on Customer

     Written by : SMTV24x7 | Sun, Jun 25, 2017, 03:11 PM

GST impact to be neutral on Customer

New Delhi, June 25: A reform will soon be implemented in India.The Goods and Services tax will be implemented from July 1, 2017. Many people are unaware of this new tax regime and how will it operate. So let's check how the GST works and how it will be beneficial for all people involved

The following central government taxes will be replaced by Central GST
* Central Excise Duty
* Additional Excise Duty
* Service Tax
* Additional Customs Duty is commonly known as Countervailing Duty
* Special Additional Duty of Customs

The following state government taxes will be replaced by state GST
* Value Added Tax VAT /Sales Tax
* Entertainment Tax (other than the tax levied by the local bodies), CST
* Octroi and Entry tax
* Purchase Tax
* Luxury Tax
* Taxes on the lottery, betting, and gambling

Centre will collect Integrated Goods and Service Tax (IGST) when goods and services are manufactured in one state and will be supplied/consumed in another state.

The traders/manufacturers/ retailers /distributors will avail Input Tax Credit on the GST paid.Earlier the manufacturers were not availing the ITC so they used to hike the prices of goods and services offered.

Currently, the each and every person involved in the supply of goods used to pay different taxes and it used to have a cascading effect.In GST the whole chain is linked and no one can escape.

The impact on consumer will be as follows

* The daily usable items will are exempt from GST such as rice, eggs,
milk, meat so that these prices will be reduced.

* 80 % of items are in tax slabs of 5, 12,18 %. so the impact will be neutral.

* Luxury items will attract a higher tax rate of 28 %.

Finally, the government will be benefited because more people pay tax and the government gets huge revenue.