Mr. Sanjeev Bhatia, CEO, ZOPO Mobile IndiaGST has become the talk of the town today. There are mixed emotions being expressed by people all over India. GST is a revolutionary step that will drastically change the state of the Indian economy. The biggest advantage of GST is that it will encapsulate the entire nation in one single uniform tax. The GST will definitely lead to simplification,uniformity and a hassle free environment throughout the Indian industries.A nationwide application of GSTIN and e-bill generation will make the selling process easy, efficient and effective throughout the country.
In the current scenario, there are different taxes on both, goods and services. Service tax is levied by the central government whereas VAT is levied by the state government. Apart from that, there are so many other taxes like CST, Excise, CVD, Octroi, entry taxes, luxury taxes, etc., which makes doing business in India, a tedious task.After GST, things will be simplified; there will be no road permits and no forms to be filled out for inter-state selling. As traders, we were not able to get the desired input for services, although we are paying Service tax. But after GST, we will be able to get inputs for both goods and services.In the manufacturing sector, there is an excise duty and VAT(which is different in each state) which is applicable, but after GST it will just be CGST and SGST, or IGST (12%) depending on where you choose to sell your product. As of now the Import sector has BCD, CVD, SAD and ADD, whereas after GST it will only be BCD & IGST. In simple words, GST will overcome the complexity in the Indian economy and make it a business friendly economy by simplifying everything to a great extent.
Now, as we all know that there are 5 categories of the GST implications
Exempted categories – 0%
Commonly used Goods and Services – 5%
Standard Goods and Services fall under 1st slab – 12%
Standard Goods and Services fall under 2nd Slab – 18%
Special category of Goods and Services including luxury – 28%
A majority of 80% of the goods and services will fall in the below 18% slab and the 20% will fall in the above 18% slab, thus reducing the cost of necessity and increasing the cost of luxury.Commodities like daily needs/essentials, raw food items, food grains, etc., that are used by common man will all be tax exempted. Commodities and services like luxury items, 5-star hotels, luxury cars, etc., will see an increase in their price.The presence of BCD will ensure protection to the domestic industry and encourage the ‘MAKE IN INDIA’ campaign. It will save foreign exchange and encourage youth employment. Foreign goods will not be able to compete with domestic Indian products until and unless, manufactured in India. This will also lead to increase in investments, thus leading to an overall economic growth of India.