Since the time GST has been introduced, there are a lot of speculations which have been going around. Undoubtedly, GST has taken a center stage and is responsible for smoothing out the harsh edges of the existing taxation system. Tax policies are the key driving force in the economy and it is time for the Indian economy to get a makeover by means of GST.

GST bill in India is a very well thought-of decision and it is being brought into action with multiple objectives. The main aim is to simplify and rationalize the indirect tax structure and GST will subsume the various kinds of indirect taxes. The new tax regime will be levied on both goods and services at the center and state level. Certainly, there are going to be certain commodities which will be kept outside the purview of GST. In totality, there are more than 1,200 goods and 500 services which will fall under the umbrella of the new tax regime.

Now, the government is issuing all kinds of GST details which are baffling and confusing. Numerous people are afraid of the kind of impact the new regime might end up having on the economy. To assist you in seeking answers, this article will provide you with a glimpse of the various ways in which GST will impact the Indian economy.

Simplified Tax Structure:

GST bill in India is being brought in with this objective. The main idea behind giving a new face to the India taxation system is to merge all the different indirect taxes into one so that there is a drastic reduction in the paperwork and accounting complexities. A simplified tax structure is nothing less than a blessing for the various sectors operating within the vicinity of the economy as it will help them in saving both time and money.  

A major boost in consumption levels:

If you happen to scrutinize the current retail price structure of manufactured products in India, then you will get to know that the entire tax component is approximately 25-30 percent of the total cost of the product. A successful implementation of GST bill in India will lead to lower taxes being paid by consumers, hence, the overall costs will come down significantly. These reduced prices are bound to increase the consumption levels which will be of immense benefit to the companies.

Benefit for the government in the form of greater tax revenues:

A simplified tax structure can bring a host of benefits for the government as well. Less complicated tax arrangement can lead to greater compliance which will end up increasing the number of taxpayers and this, in turn, will boost the revenues for the government. GST details emphasize on its ability to get rid of the cascading effect which will encourage people in complying with the set guidelines. This will have a greater impact in widening the tax base.

The Greater Number of Exports:

An increase in the number of exports is considered as a sign of a healthy and booming economy. As GST will help in reducing the production costs to a massive extent, the competitiveness of Indian commodities in the international market will increase manifolds. This will be a favorable situation for the exporters who are competing with the global players.

Conclusion:

Undoubtedly, GST bill in India will cause a significant impact across the value chain. India is a growing economy and with the services and project like Make in India kicking in, a shift from income-based taxes to consumption based taxes will surely give a boost to the revenues of various businesses. However, in the shorter run the effects might not look very pleasing but in the future, one will be able to witness the benefits of GST.