GST: Five things you should know

1. Replaces as much as 17 of other state and central taxes.

 How Swachh Bharat Cess costs you more            Source: http://www.simpleinterest.in

You won’t have to wonder anymore why a Swachch Bharat Cess was being charged on McD’s burger. Govt said the money would go for the promotion of the Swachch Bharat Abhiyaan which is again debatable. Point is many such arbitrary taxes levied by the State or Center will be a history.

 

2. Manufactured goods will become cheaper.

Lowering of indirect taxes at goods and services stage or the stage of consumption will not only benefit the consumers and will lead to a 7-9 times increase in domestic consumption but also the corporate as it will simplify their decision-making regarding tax-benefits.

 

3. Cheaper Automobiles

It will lower the indirect tax incidence over a period of time, which will lower the costs of manufactured goods.

India currently levies 32-40% indirect tax based on class of cars which is expected to come down to 18-20%. China operates at 17% and the global average GST is 16%.

 

4. Faster Transportation

Lining up of trucks on state borders to pay taxes will be a history and this will lead to a shorter and faster transportation. In developed markets, trucks cover 600-800km a day on an average whereas our average is only 250-300km a day.

 

5. Higher GDP

This will not only result into easier administration of taxes but also a probable rise of GDP by 2%. 

 

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