GST Impact: Explained
GST, also known as Goods and Service Tax, was launched on 1st July 2017 to implement a unified tax system. This tax system will be eligible for all kinds of goods and services. The primary idea behind GST registration was to stop the payment of indirect taxes by businesses and achieve “One nation one tax”.
Since its implementation, GST has had a major impact in the Indian economy. The annual revenue collection of the government has seen a rise of about 12%. Over the past couple of years, the assessee base under GST has also increased by about 85%.
The big brands have experienced major benefits and it is important to look if improvements in GST filing can improve these brands' future.
Impact of GST on the distribution of goods
Following the implementation of GST, the manufacturing brands are experiencing an increase in competition. The brands have done away with paying indirect taxes, which has come as a breath of fresh air. As a result, they no longer have to follow the various compliances associated with those indirect taxes. Thus this sector has seen massive growth.
With GST implementation, businesses must register for GST and cannot be exempted from the tax regime as before. Thus all firms registered as functioning in the country will be monitored under the new GST tax regime. The retailers and service providers will not have to pay any indirect taxes now and can function under only one tax- the GST. They have to register every state where they are operating now while filing GST.
Previously the service tax and VAT possessed their returns and compliances. With GST's introduction, they were all merged into one, and now GST has 11 returns. Some of the most notable GSTR include GSTR-2, GSTR-4, GSTR-7 and GSTR-9. GST filing online has made the job easier for businesses, who can submit their GST details for paying GST online. After getting the GST bill, calculating GST is a must to be aware of the exact amount his business needs to pay.
Impact on various sectors
GST services had a significant impact on all the country's big brands, as businesses have experienced massive growths. The following are some of the benefits the various business sectors have experienced since the implementation of GST-
The agriculture sector contributes 16% to the Indian economy, the highest contribution made by any industry. GST's implementation was good news for the big brands of this sector as they do not have to pay the high transportation costs across all the states as before. Thus they have been able to save a considerable amount of their capital and invest that amount in more productive areas, leading to better agriculture.
Following GST's implementation, all types of taxes like road tax, sales tax, VAT, and excise duties made way for a unified tax GST, leading to a massive boost in automobiles sales. Many big automobile brands experienced record growth in 2018 and 2019. Customers thought it to be the ideal time to invest in automobiles, especially with credit cards, as they could save a lot due to low-interest rates.
Also known as the Fast-moving consumer goods, this sector also saw huge benefits with GST's introduction. GST was instrumental in reducing the costs required by brands to build numerous sales depots. Thus, this sector's big brands have enjoyed significant benefits over the past years with reduced logistics and distribution costs.
This was one of the largest booming sectors before GST's introduction, and it reached new heights following GST registration. Big e-commerce brands have experienced growth exponentially and understood the tax system's benefits in the long run. However, GST's TCS scheme has not been welcomed by them as the rate is expected to rise from the present 1% based on the amount of revenue and sales of e-commerce brands.
This is widely considered the backbone of the Indian economy. GST came as a welcome boost to the ambitions of the big brands of this sector as they were able to expand their operations across the country to meet the expected potential and bring success to their customers and investors.
Real Estate sector:
This sector has seen a significant rise over the past few years and has been a significant employment source. It is an industry that is mostly dependent on tax rates, and following the implementation of GST, there is only one tax. GST on real estate has led to more efficient operations, and many new brands have come up. Thus these brands have been able to boost the economy of the country massively.
GST has had a massive impact on the economy of the country following its implementation. The consumers seem to be the clear winners as they do not have to pay lump sums in indirect taxes. But it has had its share of disadvantages, including filing returns. The GST collection fell short by 20% as projected initially in the budget. Despite having multiple disadvantages, it has positively impacted businesses. All kinds of business brands have seen massive growth in the past few years, and even smaller companies have been able to sustain themselves with the relief of the tremendous tax burdens.
Businesses have been able to catch the eye of foreign brands and are willing to invest. Thus it has paved the way for more job opportunities and employment in the country, which was necessary. The big brands have saved enormous amounts as they no longer have to pay indirect taxes following GST registration and can turn their attention to spread their business more. Businesses can register for GST easily by going to the GST site and complete their GST registration online to obtain a new GST registration.
|We hope our article turned out to be useful for you. For more such informative content, you can visit these linked articles as well:|
|GST On Gold Jewellery||GST On Electric Vehicles||GST On Restaurant Bills|
|GST On Cars||GST On Rental Income||Impact of GST On IT Industry|
Stay updated with new business ideas & business tips with OkCredit blogs in English, Hindi, Malayalam, Marathi & more!
Download OkCredit now & get rid of your bookkeeping hassles.
OkCredit is 100% Made in India.
Q. How has GST brought about a unified tax system?
A. GST was implemented to integrate the country's economy by eliminating indirect taxes and introducing a uniform tax rate. This would break the economic barriers prevailing in the country and transform it into a national market. The scrapping of various indirect Central and State taxes will promote the production of Indian goods, thus increasing trade among states and beyond the borders. All imported goods will be charged with IGST, which is composed of the SGST and the CGST, so that there is a uniform tax system on both local and imported goods.
Q. How has GST boosted the economy of the country?
A. The Indian economy had experienced a significant boost since GST was implemented. It is expected to increase the GDP by 1-3%.
Some of the benefits that happened as a result were-
- There was an increase in the number of manufactured goods locally.
- A unified national market was created for the trade of goods locally and in other parts of the world.
- With the rise in locally manufactured goods, there was a rise in exports and investments.
- More local job opportunities came up with the increased manufacture of local goods.