Tax Law Videos - GST and its effects on the common man

The Goods and Services Tax is among one of the most discussed topics in the country today and it is also an area of discussion which brings in a lot of curiosity into the minds of people. A point that needs to be very importantly made clear is that the claim that GST will end up making almost all categories of goods expensive is not true. Once the provisions of GST come into effect, other than the fact that the payment of taxes will become comparatively easier, it is also true that a number of goods will become cheaper as compared to before. 

The GST is an indirect tax throughout India to replace taxes levied by the central and state governments. It is a single tax replacing all the taxes as are otherwise levied by the government, thus making the entire procedure of paying taxes much easier comparatively. The GST is governed by the GST Council and its Chairman is the Union Finance Minister of India. 

A basic change that will be brought in by the enforcement of the GST is the bringing in of uniformity with regard to taxes. Hence, where a variety of taxes were charged for a variety of reasons until now, there will be one uniform tax which will be charged in place of all those taxes. The GST is scheduled to come into force from July 1, 2017.  

Certain goods such as jewelry and phones and certain services such as eating out and buying things online will become more expensive. At the same time, certain goods and services such as cars, LED TVs and readymade garments will also become cheaper. 

The enforcement of the GST will make actual payment of taxes a lot easier, as all taxes levied by the government will come under one head. There will be no need, hence, to fulfill different formalities for different types of taxes once the GST bill comes into force.

If we take an example, the effective excise duty when buying readymade garments today is 7.5%. Under GST, a VAT of average 5% will apply. Thus, if you pick up a Rs.1000 T-shirt today, you pay 1125 including various taxes. But if GST is kept at 12 percent, then your final bill will be Rs.1120.

The GST, because it is something new in place, will lead to some degree of concern among the people, but at the same time, it is also true that the system will slowly and eventually fall into place with regards to the people of the country.