One nation, one tax, one market will benefit Everyone

Posted by Shubham Gupta Purwar
June 29, 2017

Self-Published

One nation, one tax, one market will benefit Everyone

The central government claims that with the implementation of the goods and services tax (GST), the biggest tax reforms system will come into existence in the country after independence. In the minds of the people, different kinds of questions are fluttering about it. But the biggest question is, what will be the impact on the middle income group?

After implementation of GST, all taxes made on goods and services will be included in the same tax. Prices of goods and services will be virtually identical across the country. The cost of making material decreases, which will be cheaper for consumers. Tax rates are estimated at 18 per cent after GST is implemented.

It is evident from the fact that at present, where tax has to be paid 25-26 per cent, after the implementation of GST only 18 per cent has to be given. Tax deduction from 26% to 18% tax, this will reduce the prices of goods, said by well-known economist Subrokal Dutta.

Under GST, the three CGTS will be the first CGST ie central GST which will be recovered by the central government. Second SGST i.e. State GST which will be recovered by the state government on its business. If there is any business between two states, then the IGST will be charged as Integrated GST. This will recover the central government and it will be divided in equal proportion in both the states.

Clearly, the number of taxes on goods will be reduced, then it will surely benefit to the consumers.

Datta said, “With the introduction of GST, it will not only decrease the prices, but the tough competition between the companies and the industries will begin. For an example, we can see that after entering Reliance Jio in the field of 4G, the whole telecom sector were bound to reduce their cost. Thus, this will increase number of promotional offers in the market, to promote their goods at large scale. This may be the issue for the companies but huge benefit to the consumers.”

Last month, Nitin Soni, Director at Fitch telecom sector told, there could be a short-term disruption in the telecom sector, but it should normalize after some time. “Prepaid usage might be hit temporarily”.

Further Economist said, “In fact, today same product cost is different at different states. The reason is due to number of taxes in different states, and this varies the rates. Issues are solved once the GST gets roll out.

It is a big relief for both government and public. This will reduce corruption like black marketing, tax evasion, etc…

Different sectors has different opinion on GST, have a look,

Ecommerce

One of the major impacts of GST will be that the prices of goods sold online and offline will be almost identical, this will increase the competition. This is the main concern of ecommerce industry but will benefit the customers.

See what spokesperson of amazon has to say on this “We believe GST is good for the e-commerce industry as it would eliminate hurdles in inter-state delivery and subsume the entry tax introduced on e-commerce shipments by some states.

Startups

Currently, every state in India has different tax system and this is the big confusion for many companies that have a pan Indian presence, specially the e-com sector.

According to some tax expert analysis, GST will largely prove to be the biggest advantage for start-ups, removing scope for shadow expenses.

Real Estate

Similarly, Real Estate is one of the crucial sectors of the Indian economy which plays an important role in providing employment opportunities. This sector largely depends on the tax rates.

Sudeep Anandapuram of realty startup Zippserv, observed that they will have to rethink their focus areas once GST is implemented. GST rate of 12 percent will be applicable on under-construction properties.

Relocation Industry

Movers and Packers industry helps you to move your office, house or anything from one place to another. This sector is increasing every year but still to call industry it will take time.

Even Rahul Pillai, CEO of Interem Relocation also agreed on our sentence which is mentioned above. Relocation business is always pan-India or globally. Multiple States mean multiple tax structure which has been a great pain for the transportation industry. It is great news for us that GST is getting implement. This will be a huge benefit for a relocation sector

One of the major impacts of GST will be that the prices of goods sold online and offline will be almost identical, which will increase the competition, which will directly benefit the customers.

Lastly, Economist Subrokml Dutta said, “Will reduce the impact of hitting the online companies on the traditional markets of the GST, because the current system was exempted from some taxes on online sales, which is why prices of online selling goods were lower than offline. But tax rates on both the GST will be almost identical, so that competition in the market will grow and benefit to the consumers will be on large scale.

Now, let see how the central government’s plan of ‘One nation, one tax, one market can roll out once the GST gets implement.

Agriculture Sector

The agriculture sector is one of the largest sector in India, where people are mostly depends on it. It Covers 16 per cent of GDP. With current update GST may provide India with its first National Market for the agricultural goods. One of the major issues faced by the agricultural sector is transportation of agro products across state lines all over India.

“several food items such as edible oil, tea, coffee sugar etc have been kept at 5 per cent… this would bring cheer to the industry,” said Pratik Jain, tax expert with PwC.

BFSI

Among the services provided by Banks and NBFCs, financial services such as fund based, fee-based and insurance services will see major shifts from the current scenario.

“Financial institutions may be able to absorb this tax on behalf of companies which do bulk transactions but individuals will certainly have to pay more, though it is unlikely to have any large impact on demand,” said Sachin Menon, partner and head indirect tax at KPMG.

Advertising Industry

Advertising Industry is going through tough time over the last decade and still trying to recover from the past recession problems. Low margins, cut throat competition, fast changing marketing techniques have imperfected almost all in the sector.

Like all other sectors GST is expected to make a structrial change in the advertising sector too. This is one sector where multiple taxes is currently applicable. I am sure the GST will be a game Changer for the advertising sector too, Shruti Mishra, AGM, Flags Communications.

One of the major impacts of GST will be that the prices of goods sold online and offline will be almost identical, which will increase the competition, which will directly benefit the customers.

Lastly, Economist Subrokml Dutta said, “Will reduce the impact of hitting the online companies on the traditional markets of the GST, because the current system was exempted from some taxes on online sales, which is why prices of online selling goods were lower than offline. But tax rates on both the GST will be almost identical, so that competition in the market will grow and benefit to the consumers will be on large scale.

Now, let see how the central government’s plan of ‘One nation, one tax, one market can roll out once the GST gets implement.

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