Pros and Cons of GST and How to calculate it – Piramal Finance 

Do you often think about the pros and cons of the GST? Want to know more about the GST calculator? Read on!

The Goods and Services Tax is a single, destination-based tax that went into effect in India on July 1, 2017, to replace all the indirect taxes that were already in place, such as service tax and VAT. Businesses that sell and buy goods and services, as well as consumers in the country, have been directly affected by the GST.

The Goods and Services Tax (GST) has been called one of the biggest tax reforms in the country. You can also use a GST calculator. It combines indirect taxes like excise, VAT, and service tax, which were previously levied by the Center and the States. It is charged on both goods and services sold in the country. GST Day is celebrated every year on July 1. As of July 1, 2018, let’s take a look at how well GST has done over the past year.

The Benefits of Implementing GST

• GST is meant to make India’s tax system more open and free of corruption.
• After the GST, it is easier to start a business and pay taxes than it was before.
• The composition mechanism is there to make it easier for small businesses and new businesses to pay their taxes.
• The input credit (ITC) mechanism makes sure that businesses have a steady flow of cash and that the prices of goods and services go down for consumers.
• When all indirect taxes are combined, it’s easier for both the government and taxpayers to pay their taxes.
• Getting taxes in sync
• Moving goods and/or services between states and across the country will be easier.
• GST is worked out based on the total amount, no matter what kind of sales or services are being made.
• By creating a single tax system, the GST has stopped taxes from adding to each other.
• Since it is a tax based on where the goods or services are delivered, the consumer will only pay the tax when the goods or services are delivered.
• With GST in place, India now has the same tax rules as the rest of the world. This makes it easier for Indian businesses to sell on the global market.
• After GST is put into place, inflation should stay under control. The Goods and Services Tax (GST) is expected to lower the cost of production, operations, and other costs, which will be good for consumers.
• The cost of collecting taxes goes down, which means the government gets more money.

GST’s disadvantages

• Some economists say that the Goods and Services Tax (GST) in India would hurt the real estate market. It would raise the price of new homes by up to 8% and cut demand by about 12%.
• Some experts say that the Central Goods and Services Tax (CGST) and the State Goods and Services Tax (SGST) are just new names for the Central Excise/Service Tax, VAT, and CST. So, there isn’t a big change in how many tax layers there are. You can use a GST calculator.
• Some retail products only have a 4% tax on them right now. Clothes and other items could become more expensive after the GST.
• It would affect the aviation industry. Service taxes on flights range from 6 to 9% right now. With GST, this rate will be over 15%, which is the same as doubling the tax rate.
• The whole ecosystem would have to deal with growing pains and learn how to use the new GST system as it is adopted and rolled out.

How do I figure out the GST?

After the Goods and Services Tax (GST) was put in place, many entrepreneurs asked for help figuring out how to figure out the GST paid for a transaction. You can use a GST calculator for your convenience. Let’s talk about all the ways to figure out GST in a business. To figure out GST, you need to look at the following parts of a transaction in a logical, step-by-step way.

• Find the GST rate that applies to an HSN or SAC code.
• Once the HSN or SAC code for the supply is known, it is easy to figure out the GST rate for that HSN or SAC code. GST is charged at five different rates for both goods and services: 0%, 5%, 12%, 18%, and 28%. Using a GST calculator will make it easy.
• Find out if IGST or CGST and SGST are applicable. Once the GST rate is known, it’s time to figure out if IGST, CGST, and SGST apply. People should look into the place of supply to find out if IGST, CGST, or SGST should be used.
• Supply Between States: If goods or services are sent from one state to another, the Integrated Goods and Services Tax (IGST) would apply.
• Supply within a state: If the person gives the goods or services within the same state, CGST and SGST would apply.
• Find out if GST is due on a “reverse charge basis.”
• Suppliers Can Join the GST Composition Scheme
• Find out what kind of transaction it is. Under the GST, transactions can be roughly put into one of the three following groups:
• Between Businesses, For Business to Consumer – Value of supply more than Rs.2.5 lakh and Business to Consumer – Value of supply less than Rs.2.5 lakh.

Summing up

Change is rarely easy. The government is trying to smooth the way for GST. It’s important to learn from the global economies that have implemented GST before us and have seen the benefits of having a unified tax system and easy input credits. After the Goods and Services Tax (GST) was put into place, the government heard from many people about its pros and cons. The Goods and Services Tax (GST) is a value-added tax (VAT) that is meant to be a national indirect tax on the production, sale, and use of goods and services. You can also use a GST calculator to calculate it. It will take the place of all indirect taxes that the Indian Central and State governments have put on goods and services in the past. Relevant information is given above. Make your decision wisely.

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