The Goods and Services Tax(GST) is a value-added tax levied on most goods and services sold for domestic consumption.
Performance of GST so far :-
Economic:-
States are yielding revenue growth of 11.9%, compared with the relevant pre-GST numbers.
Tax buoyancy(responsiveness of tax growth to nominal GDP growth) is 1.2, which is high by the historical standards for indirect taxes.
GST is boosting revenues of consuming states:-
There has been a desirable and equitable shift in revenues towards the consuming states, and this has happened without threatening the revenues of the producing states reflected in the small compensation requirement.
Political:-
Contribution of states for showcasing ‘cooperative federalism’ in its implementation.
All states and the Centre have worked very closely in ironing out various issues that have cropped up, and most of the decisions taken by the GST Council have been unanimous.
Close cooperation between the Centre and states in introducing anti-evasion measures, like the e-way bill, led to a turnaround in collections,
Since there was no evidence of a GST-induced inflation spiral, the legislation was used sparingly and price fixation was largely left to the forces of demand and supply, which worked very well in most businesses.
IT replaced the inspector:-
In the GST scheme, information technology has replaced the inspector. Everything from return to refund is done through online information technology.
Check posts gone, logistics benefit
The check post has become extinct after the arrival of the GST scheme and the movement of goods has become faster, which not only saves time but is also accruing benefits in the area of logistics. GST is probably the biggest tax reform in the world
Impact of GST on Manufacturers, Distributor, and Retailers :-
With GST in place, the compliance burden has eased and this sector will grow more strongly.
But due to GST business which was not under the tax bracket previously will now have to register. This will lead to lesser tax evasion.
E-commerce:-
The e-commerce sector in India has been growing by leaps and bounds. In many ways, GST will help the e-com sector’s continued growth.
Pharma:-
On the whole, GST is benefiting the pharma and healthcare industries. It will create a level playing field for generic drug makers, boost medical tourism and simplify the tax structure.
Telecommunications:-
In the telecom sector, prices will come down after GST. Manufacturers will save on costs through efficient management of inventory and by consolidating their warehouses.
Handset manufacturers will find it easier to sell their equipment as GST has negated the need to set up state-specific entities, and transfer stocks. The will also save up on logistics costs.
Real Estate:-
The sector will see substantial benefits from GST implementation, as it has brought to the industry much-required transparency and accountability.
Agriculture:-
One of the major issues faced by the agricultural sector is the transportation of agri-products across state lines all over India. GST will resolve the issue of transportation.
FMCG :-
The FMCG sector is experiencing significant savings in logistics and distribution costs as the GST has eliminated the need for multiple sales depots.
Freelancers :-
With GST, it will become much easier for freelancers to file their taxes as they can easily do it online. They are taxed as service providers, and the new tax structure has brought about coherence and accountability in this sector.
