Understand the Impact of Goods and Services Tax (GST)
With the implementation of the Goods and Services Tax (GST), the regime of multiple taxes has changed and in turn, a uniform tax regime has been brought in place.
This change has been brought into place keeping the common taxpayers of India in mind.
Major Impacts GST on NBFCs and Banks
- Problems with registration as there will be an increase in the number of branches
- Apart from registration, the burden of compliance with regards to the filing of returns will also rise substantially so far as the number of return formats, the periodicity of returns and the level of information needed in these returns is concerned.
- Leveraging and De-Leveraging of Input Tax Credit
- Harder Assessment as well as Adjudication
- Account Linked and Non-Account Linked Financial Services
- Companies that have established a widespread presence in remote areas may be hard-hit by GST as their operations and transactions will have to be carried out from offices situated in some other state.
- Actionable Claims
- Under Service Tax, actionable claims are not treated as services and the current regime has no liability for the payment of taxes.
Impact of Goods and Services on the Automobile Industry
The Indian automobile industry is fast-growing, and thousands of new cars are produced every year. The present system levies a number of taxes on the sector, such as sales tax, excise duty, motor vehicle tax, value added tax, road tax, registration duty, which are expected to be subsumed by GST.
- The implementation of GST is expected to lower the cost of producing cars as various taxes that are presently levied will subsume.
- The state of consumption will be subject to taxes instead of the state of origin under GST, which would gradually enhance the automobile industry and the rate at which it is growing.
Impact of Goods and Services Tax on the Agricultural Sector
The costs incurred by retailers and farmers would be reduced through the implementation of a superior supply chain mechanism, and there will also be a reduction in wastage.
- The cost of heavy machinery needed for the production of agricultural goods will also be lowered by GST. Agriculture, under the model GST regulations, does not include stock breeding, poultry farming and dairy farming, and will therefore not attract any tax under GST.
- However, GST aims at increasing the rate to 12%, which means that there will be an increase on the price of milk.
- Even the cost of tea, which is among the most common household commodities in India, is expected to increase from the present VAT rate which stands between 5% and 6% in most states.
Impact of Goods and Services Tax on Startups
All taxes that are currently levied on startups will be subsumed by the implementation of GST. Startups are among the few beneficiaries of GST, and here we will look at the various ways in which GST will aid startups and help their growth.
- Greater Registration Threshold
- Tax credit on purchases made by Startups
- More convenient online procedure
- Easier taxation
- Enhanced efficiency in logistics
Related Articles on GST
- Gst Benefits
- Gst Bill
- Gst Compensation To States
- History Of Gst
- Gst Limits
- Accounting Of Interest Tax Under Gst
- Composition Scheme Rules Under Gst
- Differences Between Gst & Previous Tax Structure
- Impacts On Gst
- Imports Under Gst
- Refund Process Under Gst
- Treatment Of Tds Under Gst
- Types Of Gst
- Voluntary Gst Registration
Disclaimer
Credit Card:
Credit Score:
Personal Loan:
Home Loan:
Fixed Deposit:
Copyright © 2025 BankBazaar.com.