An overview of gst impacts on a common man

The very well talked about tax regime not only has impacted businesses and producers but also has enormous consequences on a common man. Meant to pull the pressure off the necessities and lay the greater tax burden on the luxury items, GST is aimed to consolidate sixteen taxes and twenty-two cess into one tax. India has always been a country where the income distribution hasn’t ever been even. The rich kept getting richer, and the poor poorer. GST, thus far successful, aims to bridge that gap and make at least, the necessary items viable to the poorer.

Although, the impacts of GST can be seen in a variety of goods and services. It has clearly impacted all areas of services and industries and hence, the impacts have been spread through all- the businessman, the common man, the service providers and the rich. Benefitting some more and others less, GST is meant to help the economy in the long run. The benefits of GST are enlightened in the GST online classes.

The very impact of GST that is it removes the cascading effect, i.e, taxes on taxes, making goods cheaper to the final consumer. Cascading has always been the biggest downside under our tax regime and hence, with the removal of the very shortfall, it has turned out to be the biggest benefit to the common man. The input tax credit will essentially help to get away with unnecessary inflation as can be seen by the reduction in the prices of so many goods and services. The slab rate for necessary items has been kept between 0%-5%, thus, making sure that products like FMCG, daily consumption are made available to all despite the income gaps. Moreover, items like cigarettes, luxury items like- business class tickets, star hotels etc., have been seen paying higher taxes than before.

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Although services like cabs and holidays at hotels having tariffs under Rs.7,500 aren't impacted much. The differences in the levy of GST can be seen in air tickets- business and economy, necessary and luxury items and air-conditioned and non-air-conditioned hotels. People travelling from business class will now be looking at a tax rate of 12% on their fares instead of the 9% earlier. FMCG products, although, got cheaper. But, services like dry-cleaning and telecommunications got more expensive.

Real Estate and jewellery items, that is the biggest investment for a rich person hasn’t remained outside the purview of GST. Yet, the completed properties remain out of question. But, the under-construction properties have attracted a higher tax rate than did earlier, thus, making investments in real estate more expensive and again, a whirl to decrease the inequalities in the income. This immediate inflation of the real estate properties can be seen offsetting in the future as we achieve the very goal under GST- i.e, reducing the prices of all goods and services in the long run. Earlier, jewellery attracted a tax rate of 2% which has now been seeing levied a rate of 6% under GST. Furthermore, rates on a varied range of commodities and their impacts are elaborated in the GST online classes.

If we put basic economics, the fall in the prices of goods and services would eventually cause an increase in its demand, thereby, leading businesses to produce more and creating more employment opportunities in the long run. Because in the short run, certain small companies that aren't in the tax net yet and can’t afford to pay GST will be shut down and run out of businesses. Enhanced employment can be seen converting into increased GDP for India in the near future thereby, contributing directly to the standard of living. Hence, the positive impacts of GST are a sight for the future but only if GST actually ends up providing the implied benefits to the final consumers.

Despite everything, GST is expected to bring down the prices of ‘all’ goods and services in the long run as the benefits kick in. Hence, the inflation that can be seen by a particular sector because of the rollout of GST is temporary and is bound to help all classes in the long run. The rollout of GST created a fiasco amongst people as most of them were unaware and needed to know the impacts of GST on their businesses, this led to the government coming up with various GST certification courses. Till then, we wait for the benefits of GST to come into realisation and bring in the much-awaited benefits for our economy, when it is of the essence.