Unique features of GST: As compared to the earlier law, Integrated GST, Anti Profiteering provisions and Matching concept are unique features of GST. IGST has reduced cost burden and headache of C forms etc. Anti profiteering measures have made mandatory for the suppliers to pass on the tax benefit to the end customer. Matching concept will bring financial discipline amongst the suppliers and will check the tax evasion.
Impact on various stakeholders
After the comparison as above, its impact on various stakeholders is discussed as under –
A) To Tax payers :
- GST is expected to bring overall financial discipline in the businesses as tax payment will be prioritized over other payments in view of matching concept.
- The concept of “Supply” as point of taxation is very wide, easy and has resolved many disputable issues in earlier laws.
- Number of returns to be filed in GST are substantially reduced as compared to earlier laws. Also, all the returns are now to be filed with single authority.
- The principles of valuation have been simplified and will increase the ease in doing business.
- The Input Tax Credit is more or less on the same old principles except eligibility of capital goods credit. The tax payers are getting more input tax credit than earlier provisions.
- The cash flow is adversely affected on account of higher cash outflow.
- The peculiar features of IGST has encouraged the businessmen to restructure their businesses by consolidating number of depots.
- Tariff disputes will definitely increase in GST .
B) Impact on Government –
- The threshold limit at Rs. 40 lacs is very low and has widened the tax base to a large extent. Hence the Government earnings are increasing.
- The revenue collection will be prompt and in time.
- More and more tax payers are coming under the tax net voluntarily. This will automatically reduce tax evasion.
- More staff can be deputed for audit and investigation wings.
C) To Society
The society at large is expecting to get the benefits of GST transferred to the end customer.
Services have become costlier to the common man as the service tax rate of 15% has been increased to 18% in GST.
D) To the Economy :
As the scope of supply is widened, economic growth is expected to increase.
India has not experienced high rise in inflation after introduction of GST as compared to other countries.
From the above, it can be concluded that GST has been introduced as a major reform in indirect taxes. As compared to the earlier provisions, in major areas, earlier shortcomings have been removed.