Impact of GST on Consumers

The Goods & Services Tax (GST) is a national tax levy on the manufacturing, sale, and consumption of a product that distinguishes between goods & services to impose the tax. It would largely replace all indirect taxes collected on products and services in India by the Federal and Local governments.

The benefits of Goods and Service Tax (GST)

Prices are consistent across the country: We used to have a State Value Added Tax (VAT) that was collected on the sale of goods in the former tax regime. Prices varied because tax rates differed from state to state. Certain taxes and levies (for example, entrance tax) was only charged in particular states. Because GST is a ONE NATION ONE TAX, there is standard pricing for all items and services across the country, and no such difficulties exist.

Rely on a simplified tax system: The previous structure of indirect taxes is too complex for the average person to grasp. Because everything is computer-generated, GST will raise the level of openness and trustworthiness of customers concerning tax administrations such as enterprises. This will boost customer trust in the streamlined tax system.

Better access to products and services: Because all goods and services are taxed at the same rate nationwide, consumers do not go shopping between countries to save on taxes. In addition, online retailers will organize their operations to reduce the time required to manage warehouse facilities, which now rely on completing the complexity of the current tax system.

DISADVANTAGES OF GST

• Costs connected with software and periodic updates have risen- One of GST’s minor drawbacks is the additional expense of updating outdated accounting information systems to GST-compliant. Many businesses must gain updated GST software to stay in business. Employees must also be trained to use the price determination software effectively. This, however, raises the expense of running a firm
• Impact on working capital- Working capital refers to the financial resources needed to run a business daily. Following the introduction of GST, many companies, especially SMEs, have seen a reduction in working capital. Operating costs increased, and sellers and exporters could not file tax returns on time. Services also became more expensive because of the negative impact on the company’s business capital. This is one of the most important damages to GST
• THE BURDEN OF COMPLIANCE-Each company is required by the GST scheme to register on the GST portal in the country where it operates. The entire procedure might be tedious. This adds more stress and bureaucracy to Indian businesses, which already face many governmental impediments. Most consumers aren’t readily persuaded to use technology, making things very hard for new enterprises

Conclusion

From the time GST has come into force, the entire tax reform structure has gone through a drastic change. Though the system is not ideal, once in operation, such a tax relationship will help India a more attractive market for international investment. It is a widely recognized and liked regime since it eliminates various tax rates levied by the Centre and the States. And if you own a company, satisfy two conditions since it will not only aid the Indian government but would also allow you to track company business on even a weekly basis, as GST requires you to submit an operational performance summary each week.