The Aftermath And The
Good effect of the “ Goods And The Service Tax ”
Ever since the Government under the Manmohan Singh took the
office from 2009 and ruled it upto the mid year of 2014, the GST which is known
as the GOODS AND THE SERVICE ACT saw many of it’s ugly war by the ruling party
then and by the opposition to FIRST know it completely and then take the step
to implement that.
It was the Manmohan Singh Government which initiated the process
of formalizing and formulating a UNIFORM tax structure for the nation and the
team under Mr P.C.Chidambaran laid out
the long drawn path and the process of laying it but it could not implement
that.
The reasons were many but the MAIN one was-:
THE UPA BEING A HOUSE OF MANY
WEAK AND FRAGILE REGIONAL PARTIES SUPPORTING THE CONGRESS THEY FOUND IT VERY
HARD TO CONVINCE THEIR SUPPORTING PARTNER TO IMPLEMENT THE SAME .
It is very clear and pertinent to find out the fact that in a country like India which is so HOMOGENOUS by nature and which is segmented into so many a different area of very different belief that prevails in the business as the whole and with the magnanimity of those areas which totally hinges on the MINI-AGRICULTURE, this and these kind of a taxation and it’s system would find it hard to survive in it’s meaning , to cleanly get the schemes like this one, the GST implemented in ONE go.
It was not at all possible by the UPA to do that and even if Mr Chidambaram who I consider as ONE-OF-THE-WORST-EVER-FINANCE MINISTER – that India had ever had, however a shade better than the TWO-WORST-COMBINE , Mr Shankar Rao Chavan and Mr Janardan Pujari to see to it he could implement that and he somehow managed to escape the WRAUGHT of the same by not implementing the same.
The “ NDA ” COULD DO THAT.
This kind of a system which accords the implementation of these
kind of a TAX-STRUCTURE was possible because Mr Modi and the NDA was given an
ABSOLUTE majority in the house and the BJP under the leadership of Mr Modi got
the plans on the mat and then laid it on the earth with India as this was the INDIAN
“ GST ” on the maps within the country of India and this thus
became a REALITY.
This could not have been possible at all if the country DID
NOT GIVE that kind of a mandate to the national party which is
known as the BJP. Mr Modi and the BJP got that and he made it possible to it to
see that this was implemented.
THE CREDIT GOES TO THE BJP
WHOM THE PEOPLE OF INDIA GAVE THE MAJORITY TO TAKE ANY AND THAT KIND OF
A STEP.
“ IT IS THE INDIAN
VOTERS WHO OUGHT TO BE COMPLIMENTED FOR THE SAME ”.
Anyway the moment came and before it could whiz past be the GST
was implemented at India .
It was July 1st 2017 that the GST was laid at India
and implemented. Ever since that the GST created many a positive vibes but with
it it also created so many a hazards and obstacles which seems to be very
teething in nature but is not that hard that it cannot be sorted out as any
kind of a problem that is seen which has no solution at sight.
This is NOT the PoK problem that needs ambushing and war to
solve it but this requires a THOROUGH field study of the problems, the teething
hindrance or the problems which are surfaced at the field and the ground level
and come to an solution for the same.
The Aim Of “ GST ” ::
Consolidation of the INDIRECT TAXES
Pic :: Consolidation Of The " GST "
The Goods and Services Tax or GST came into effect on the 1st of July 2017. The aim of
introducing the tax was to replace all the existing indirect taxes
with a single comprehensive tax. Through GST, all indirect taxes such as central excise tax, service tax, VAT and
entertainment tax were consolidated. This major step has helped the
citizens of India to file their taxes easily without the hassles they faced
earlier. And, this article will
discuss the impact of GST on the Indian economy.
What is GST?
Initially during our days when we were
the overall incharge of the business unit, we had to file the taxes after the
sales were effected. In those days we had the CENTRAL SALES TAX, the STATE GOVERNMENT TAX, and then the direct as well as the indirect
taxes which were implied and applied as the the modalities of the sale. The TAX CONSULTANTS would file
the taxes with the authorities and that is what the process was.
This many a taxa and it’s form like
the LAST –POINT-TAX at
the Union Territory, the TURN-OVER
Tax, the CESS and the tax like the OCTROI, the STATIONERIES
TAX and many other taxes were really a HARD – WRECKS of
the mind and the mental state of the same.
The fallacies of the system would be
that no sooner that one module of the tax application would see it’s death, the
other would come in to cover up and replace the previous one and the worst kind
of a poor taxation and it’s system would continue playing the game .This would
be again a unending and unbearable problem as well for the business unit to digest and to bear.
The entire system of taxation was
brought into one cover of the GST and ever since then it was and it had been,
as we see it now , the “ GST ” .
Goods and Services Tax is levied on the manufacturing and sales
of goods and services across the country. The
tax is charged at every stage of the “ manufacturing
” process. GST is applicable for “ both ” the
customer and the manufacturer.
It is a “ destination-based
” tax. This means that GST
is to be collected at the point of consumption.
So, if a product is manufactured in Bihar
and is sold in Bhopal, the tax will be levied in Bhopal. Moreover,
at every stage of the manufacturing process where value is added to the
product, GST is collected.
The types of GST are as follows:
CGST (Central Goods
and Services Tax):
The tax is collected by the Central Government
on the intrastate sale of goods and services.
SGST (State Goods and Services Tax):
The State Government collects
this tax based on the intrastate supply of services and products.
“
IGST ” (Integrated Goods
and Services Tax): The tax is charged on the supply of products and
services between two states. The taxes are shared
between the central and state governments.
Effect of GST on the Indian economy
It is over three years from now and it
become imperative to study whether the GST has really been a BOON or is there
something still needed to make amends so that it become far more accessible and
heart rendering to the users especially to the customers who pay the taxes and
the manufacturers on whom the taxes are levied and implied.
Implied method and implication of the
GST is the important factor which determines wether the country especially it’s
government would be able to completely collect the revenue from it’s existing
system of revenue collection or whether would it be necessary to make some
amends at places that would need it to make it far more accessible and possible
for the tax payers to come forward to make the payment in a very meaningful and
happy manner.
There are many points and many a field
where the GST has been successful in a proper implementation of the same beside
the revenue and it’s pooling. However there have been some cascading crushing
effect as well and that needs to be sorted and chucked out of the same.
Pic :: Falsity Of The Good Implementations Of The " GST "
Let us discuss the positive effect
that the GST has created-:
The implementation of GST has significantly affected the Indian economy in the following ways:
Simplification of the tax structure:
GST has simplified
the taxation system of the country. As GST is a single tax, calculating taxes
at the multiple stages of the supply chain has become easier. Through this,
both customers and manufacturers get a clear idea of the amount of tax they are
charged and its basis. Further, hassles
of handling tax officials and
authorities can also be avoided.
Fostering production:
As per the Indian
retail industry, at this present moment of time, the total tax component is around 30% of the product cost. Due to the impact of GST, the taxes
have gone down. This has given a sort of a motivation to the manufacturer and the
producers . So, the end consumer has to pay lesser taxes. The reduced burden of taxes has enhanced the
production and growth of the retail and other industries.
SME support:
Small and medium enterprises can now register under the Composition Scheme introduced by
GST. Through this scheme, they pay
taxes according to their annual turnover.
Therefore, businesses
having an annual turnover of Rs. 1.5
crores only have to pay 1%
GST. Moreover, other enterprises having a turnover of Rs. 50 lakh are required to pay 6% as GST.
In other words , say, a pump manufacturing unit, having onle ONE
unit of production to manufacture the pump-set will have to pay 1% of the GST
under the scheme whereas another unit, s small sacle industry having SIX small
manufacturing unit producing SIX small products, but under a SINGLE umbrella of
an organization will have to pay SIX percent of GST if their annual turnover
combined is say Rs 1.50 crores.
Enhanced pan India operations:
Companies can now avoid taxation roadblocks, such as toll
plazas and check posts.
Earlier, these created problems, including damage
to unpreserved products while transporting them. So, manufacturers had
to keep buffer stock to make up for the damages. These overhead costs of
storing and warehousing hampered their profit. A single taxation system has
reduced these problems. They can now
transport their goods easily across India. This has resulted in the
improvement of their pan India operations.
Increase in exports:
GST has reduced the
customs duty on exporting goods. The cost of production in the local markets has also decreased
due to GST. All these factors have increased the rate of exports in the
country. Companies have become more competitive when it comes to expanding
their businesses globally.
The introduction of GST has helped merge the taxes of the state
and central governments. This has helped remove the cascading effect of multiple taxes. Therefore, the burden of
taxes has reduced for companies and customers. Not just this,
taxpayers have increased in number and hence, the tax revenues have also
increased significantly. The overall taxation system is now easier to
administer.
Moreover, because of an
unified and a simpler system, small- and
medium-sized enterprises are able to enhance their businesses. The multiple hazards that erupted into the
system is now been dissolved and the tax system has given rise to many
enterprises that helps in producing more business because of the reduction of
multiple taxes at various points. It is expected that GST will help more
Indian organisations to establish themselves in the international markets.
With fall
in production cost in domestic market, the competitiveness of Indian goods in
international market will increase. This again is a very competitive yet a very
positive sign that enhances every possibilities of a reform in tyerms of the
production in the system of goods and service and it’s production and rendering
the service to the customer of the same . This
bodes well for exporters, who compete with global manufacturers which operate
on very different cost structures.
Keeping all these
potential benefits in account, a study by the National Council of Applied Economic Research says that GST will boost India's GDP
growth by anywhere around 0.9%
to 1.7% and virtually every media report cites expert opinion to
potentially add up to 2% to
India’s GDP.
However, there are sticky issues like taxation
on inter-state services, stock transfers, integration of few central &
state taxes etc.
With a burgeoning services sector and a
high economic growth trajectory that India is in today, a shift in income based tax to consumption based tax is going
to provide substantial fillip to source of revenue. Of course, there will be a short lived limited price impact
on the larger economy with introduction of GST.
However, a larger impact is expected on the
administrative compliance cost of GST which is likely to increase tax revenue
from the “ parallel ” or “ black ” economy.
In an era where the
administration is treading cautiously on fiscal deficit management, a complete
failure to implement GST had already resulted
in surging
deficit to around 4-4.2%
during FY16-17 from 3.99% and even today
it might be so and even more because of the CORONA-COVID and many other
problems thar we see and we visualize.
I have there in the picture stated how the false and the wwrong GST is killing some of the LARGE SCALE organisation. Imagine how it would be affecting the MSME's .This is a area that needs to be tracked upon and improved in terms of the GST implication very fast. This is the place where Madam Nirmala Sitaraman ought to act very fast.
Regards and Thanks
Pics
Shyamal Bhattacharjee
Mr Shyamal
Bhattacharjee, the author was born at West Chirimiri Colliery at
District Surguja, Chattisgarh on July 6th 1959 He
received his early education at Carmel Convent School Bishrampur
and later at Christ Church Boys' Higher Secondary School at
Jabalpur. He later joined Hislop College at Nagpur and
completed his graduation in Science and he also added a degree
in B A thereafter. He joined the HITAVADA,
a leading dailies of Central India at Nagpur
as a Sub-Editor ( Sports ) but
gave up to complete his MBA in 1984 He thereafter
added a Diploma In Export Management. He has authored THREE books
namely Notable Quotes and Noble Thought published by Pustak
Mahal in 2001 Indian Cricket : Faces That Changed It
published by Manas Publications in 2009 and Essential Of Office
Management published by NBCA, Kolkatta in 2012. He has a
experience of about 35 years in Marketing .
Signature Of Shyamal Bhattacharjee
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Yes, Good follow up on the this matter, as described hope a positive attitude is adopted by the authorities concerned to bring about the changes as & where required for a refined and productive results with GST....
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