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Pros And Cons of GST - A New Tax System in India

Pros And Cons of GST - A New Tax System in India
Pros And Cons of GST - A New Tax System in India

Follow the Current Affairs Articles from Achiever's Rule as it is very important for the upcoming IBPS CWE CLERKSSC CHSL Exams exam. Here we will discuss about the Benifits and Disadantages of GST. As the new Taxation system relaced all the old tax system in India. GST has many good factors and it has few disadvantages also. You need to go through in details to undertsand the complete details.

Brief Introduction:
The Goods and Service Tax is a recent kind of Value Added Tax which is implemented recently by the Government.This new tax must replace all kind of indirect taxes on goods and services which are levied in India by the Central and State Government. According to the Govt. It is a historical tax reform which can lead the economy of India to a certain height.The basic thought behind the implementation of GST is to create one cooperative and undivided Indian market to make a strong and powerful economy.
Advantages of GST-
The GST has several advantages and can be beneficial for both of the Government and common people.
  • It is an indirect tax which can decrease the burden of other indirect taxes.
  • It can benefit the registered retailers as there would not be any hidden tax.Thus the cost of business automatically reduce.
  • Prices of some products  would be less. It can increase the consumption which in turn benefits the producer companies.
  • Services must be consumed or used in the production and distribution of goods.
  • Previous taxation system of separate taxes for goods and services were little bit complex.The GST has made the taxation system easy and simple without any burden of extra tax.
  • All taxes are merged in the GST system. Thus the tax burden is distributed between manufacture and service industries. 
  • GST will be levied at the final destination of a product based on the principle of VAT instead of being charged at separate points.Thus there will be no economic distortions and  a common national market will be developed.
  • The Tax administration must be transparent and corruption free.
  • The whole GST system must be backed by the fully integrated Goods And Services Network to deal with the various aspects of GST.
  • Various essential things like television, washing machines, stoves, two- wheeler, price of dining, movie tickets, SUVs and luxury on premium cars must be cheap under the new GST system.
  • The GST law is very strict and not paying proper GST is a punishable offense.
Disadvantages of GST-
There are also some disadvantages of GST.
  • GST can affect the real estate market negatively.It would add up to 8% cost of new homes and reduces the demand by 12%.
  • According to some economists, CGST and SGST are the new forms of previously imposed taxes and it is not much beneficial for the common people. 
  • After GST the prices of retail products like garments and cloths must be increased.
  • The aviation industry will be most effected with double tax rate.
  • Adoption and migration to a new taxation system can be a complex process and it can effect the entire economy.
  • The prices of some basic necessities like mobile bills, premium charges, school fees, health care, couriers services, Rail and metro tickets must be costly under the GST.
You May Also Like to Read: Frequently Asked Questions on GST
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