GST is a revolutionary step in the indirect taxing regime, Goods and Services Tax bill got the assent of the President on the 08th day of September 2016 and became the Act. GST act as a single window for all Indirect taxes as it had subsumed the majority of the indirect taxes. GST is the thing which reshaped the Indirect tax structure and the impact of it had been seen on its stakeholders.
In an Indirect tax regime, the burden of the tax is always on the consumer, so in this article, we will see how much GST is Consumer friendly.
GST subsumed all other indirect taxes like Excise duty, Additional Customs duty, VAT, CST, Entry Tax, Service Tax, Luxury Tax, etc. so that a consumer is not needed to pay double taxes, by paying GST he/she can make himself/herself free from his/her tax liability in once in regards to such product or service. So overall by GST implementation, the mandatory compliances get reduced. GST makes the indirect tax system transparent as the consumers would know how much taxes they are being charged and for what.
Less Burden of Tax Liability
GST had reduced the tax liability burden as there is only one taxing rate in the place of the various tax rate of Excise duty, Service tax, VAT, CST etc. Consequently, it resulted in a lesser cost for some products and services.
Elimination of Cascading Tax Effect
GST is a transparent tax regime so there is no chance of charging tax on tax, in the previous system a consumer had to suffer the cascading effect of the tax, here cascading tax effect means double taxation on the same product or service.
Important: Revised GST Slab Rates in India FY 2022-23 Finalized by the GST Council
Cheaper Product and Service
In the previous indirect system, products and services are liable to be charged with various taxes on production a product attracts the excise duty on every value addition in the product attracts VAT, interstate sales attract CST, Service Tax on services, Entry Tax etc., as and when it got transferred from one to another person before reaching the consumer for consumption, which unnecessarily increased the cost of product or service. GST eliminates this cascading effect subsequently, the cost of products and services is now cheaper for the end user. So GST assures that the tax burden will get reduced.
Read Also: 7 Secret GST Benefits that Everybody Wants to Know
Conclusion
Overall in the GST regime, it is targeted to lesser the Compliance burden, reconstruct the taxing liability and make it more consumer-friendly which subsequently supports the country’s economy and GDP positively.
