GST Day 2024: How Implementation Of GST Impacted India?

On the seventh anniversary of GST, we will have a look at seven positive and negative points highlighting the pros and cons of GST. On 1 July 2017, GST replaced all the indirect taxes. Thus, the country now has a single indirect tax on the majority of the goods and services. The country’s growth manifold after the implementation of GST. A recent report also showed more people prefer GST over the previous system. The GST collection also increased over the years. Let us dive deep into some benefits of GST  below.

How GST Impacts India’s Taxation System?

1. Elimination of Cascading Effect: There was a tax upon tax under the previous system. Every item had tax at different levels of production, increasing the consumer cost. However, GST helped in the elimination of the cascading effect making things more affordable.
2. Higher Threshold For Registration: The main goal of the GST was also to prevent the flow of black money. There were a lot of unregistered companies trading in bulk earning huge amounts. As they were not under the government’s supervision, they escaped the tax mechanism. However, GST made it mandatory for organizations to get a GST number after a particular amount of revenue.
3. Simple And Easy Procedures: The GST portal is available digitally to every business owner. They can keep track of their GST payments online. Apart from that, the registration process is easy and simple.
4. Inflow Of Foreign Investment: After the implementation of the GST, more investors are looking towards investing in the Indian market. The curiosity of the foreign investors in the Indian market is increasing.

Where Does GST Lack?

1. Non-Inclusion of Petroleum Products: The non-inclusion of petroleum products in the GST tax regime leads to a cascading effect in the sector.
2. Return of expired products in FMCG: The treatment and return of expired products and their implementation is a concern in areas like pharmaceuticals.
3. High Cost: Many sectors are facing difficulties due to the increased cost of the products. Several sectors have higher rates of GST which creates difficulty for them.

In conclusion, GST has a positive impact in a higher proportion. There are negatives, but the country is managing well to grow its economic condition. Also, many calculations show that GST reduced the cost of production rather than increasing it further. There are approximately 140+ countries that have GST implemented. The system is widely preferred. Many countries are also having a positive impact from it.