Sunday, June 26, 2016

Will GST Be Beneficial for Consumers in India?

GST will almost certainly be passed in the monsoon session of parliament. It will be wonderful news for the union and state governments, the economists, the political parties who will rush to claim credit (not input credit) for its passage and the businessmen who will no longer be harassed by multiple tax authorities and will find the new tax system extremely streamlined with fewer hassles.

But what's in store for the consumers? Not very good news, I m afraid. The tax rates for goods and services may be 20% or higher and it is bound to lead to inflation, at least in the short term. GST may have a profound impact on Indian eCommerce as all online transactions would be subject to this tax. Then there is the recommendation of 40% GST on aerated drinks as a form of sin tax since these drinks are considered unhealthy. I found this a ridiculous argument as it will open a pandora s box and make taxation in India arbitrary, judgmental and discriminatory.

And finally the most stupid recommendation. GST may put the onus on the buyer to check whether the seller has paid goods and service tax (GST). So, if I eat at a restaurant and pay the bill with GST on it, should I ask the restaurant owner to show me his tax details?

Let's hope that better sense prevails and the form of GST dished out to us is more consumer-friendly and less taxing!

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