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बेसिक इंग्लिश का दूसरा सत्र (कक्षा प्रारंभ : 22 अक्तूबर, शाम 3:30 से 5:30)
Q. Benefits of GST: How Goods and Service Tax will change the face of Indian economy? Discuss.
Aug 10, 2016 Related to : GS paper- 3

Ans :

Introduction-

Goods and Services Tax is a comprehensive indirect tax on manufacture, sale and consumption of goods and services throughout India. It will create single market in the country by replacing taxes levied by the central and state governments. Goods and Services Tax would be levied and collected at each stage of sale or purchase of goods or services based on the input tax credit method.

In news-

Recently both houses of Indian Parliament have passed The Constitution (One Hundred and Twenty-Second Amendment) Bill, which creates Goods and Service tax regime in India. GST will come to effect from 1st April 2017.

How GST will change the face of India economy?

  • Input Tax Credit is unique feature of GST and it requires an unbroken chain of GST. Most businesses in India are Unorganized Sector who doesn’t pay taxes. Purchasing from them won’t have Tax Credit since suppliers as well as buyers won't allow an understatement because then, they would lose their tax credit, they tend to trade with organized sector. So unorganized sector come in purview of GST and more taxes would be collected
  • With coming up of GST, businesses can concentrate on just one tax - uniform structure, same rates, rare exceptions, one agency, single compliance. The impact is not only a simplified business but also a less expensive business administration.
  • Savings on the tax leads to lower production costs, which in turn leads to lower retail price of Goods and Services. Such situation creates surplus disposable income for more savings and consumption. This will leads to overall growth of the economy.

Conclusion-

Recently both houses of Parliament have passed GST bill, once President gives his accent it will come into effect from 1st April 2017. GST is considered as one of the biggest reforms in Indian economy. GST has several benefits and it will change the face of Indian economy.


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