Effect on Economy after Revision of Goods and Service Tax

Introduction:

Goods and Service Tax (for short “GST”) had been a paradigm shift and radical drift after the Finance Government (for short “FG”) had revised last year from four tier GST structure to three tier GST structure for reducing and decreasing the burden of levitation of high rate of GST on the consumer goods and services falling under the different list of GST goods and service rate levitation list. That main focus and purpose of revision by the finance government in the rates of earlier four tier structure comprising of 5%, 18% , 28% and 40% and recently revised to three tier structure comprising of 5%, 18% and 40% is to rationale and reduce burden on the consumers, sole proprietors and business with the prelimination of increasing and uplifting economic structure, ease of trade and business and increasing import globally and enhancing Gross Domestic Product (for short “GDP”). The GST revision after almost after 8 years of its implementation is to compress the burden on the middle class consumers, to simplify the tax structure and make the consumption of essential goods more affordable and manufacturing of goods and products easy to avail.

Goods and Service Tax tier rate reduction after amendment and making it simplified the system of tax structure for reshaping the payment of GST. That the said amendment and revision in the tier rate is to ease the tax burden of consumers significantly. That the said revision mainly focused on the consumer durables. The benchmark achieved by the Finance Government by easing and convening the tax structure and focusing mainly on the Fast Moving Consumer Goods (for short “FMCG”) which are the major requirement for layman. Further, rationalizing the four tier system to three tier system was to simplify the structure and making it more understanding for the consumers. The revision implemented upon the Goods and Service has aided in improving the gst tax structure, reducing inflationary pressures, economy has been developed and uplifted by increase of consumption of fast moving consumer and necessary goods and by the simpler structure it further improved government which is a primary factor for development of undeveloped sectors.

Stability in Economy and convenience for the tax payers:

Goods and Service Tax revision in the tax structure had upgraded the economy by simplifying the tax rate structure to three slab system, elimination of seamless input tax credit (for short “ITC”), removal of checkpoints and entrance of tax barriers at state borders increased efficiency and decreased logistical expenses helping economy thrive especially in industries and logistics with the without any iota of doubt had been a fortune of convenience in terms of systematic, non complexed and advance taxing system. That the revision of the GST tax structure had mainly visioned on economic and export supported sector also such as household healthcare, insurance, agriculture etc. Further, the revision had forwarded with the immunity of ease of doing business for small traders and farmers, strengthening security systems including e-invoice and e- way bill compliance.
 
The main benchmark of implementing GST into nation is to reduce and to minimise the burden of tax returns/payment of and to immune the tax payer from high amount of penalties and demands which by the said revision had been meted with.

Development of economy after Goods and Service Tax revision:

Further, the GST revision in the tax tier structure had helped the development of economy and Gross Domestic Product (for short “GDP”) at the core. There has been a radical shift in economy due to revision in GST tax tier structure as well as the fitch ratings increased to the unexpected growth due to GST reforms and stronger consumer sentiment. Further, the retail and FMCG had been shifted to upliftment in sales. The simplified compliance reduced costs and improved ease of doing business. Further, there had been revival on demand due to reduced effective tax burden.
The GST revision has aided consumption growth. Further, after the revision in the tax tier structure the medium term outlook is positive, with stronger consumer spending, higher GDP growth and positive bifurcations in business segments.
The said revision had also augmented the trade, business and commercialisation nationally by relieving the health care, educational, social welfare, agricultural and other sectors which has even brought greater transparency, affordability and growth momentum and has carried forward a paradigm shift in generating revenue and improving fiscal growth.

Difference on the sectors which had affected the economy positively:

The sectors which has affected the economy positively are FMCG where the GST had been reduced to 5%, farmers and agriculture products to 5%, healthcare sector to 5%, automobiles to 18% (some to 40% those which comes under luxury sector), educational items to 5% and electronic appliances to 18% and other sectors. The above said sectors are preliminary listed as pertinent and important for the consolidated improvement and perpetual increase of economy nationally. The said GST revision by the Finance Government had been a milestone and for making the economy balanced, stable, globally recognised, regulated fiscal deficit amongst others for generating revenue and enhancement of GDP.

Conclusion:

Goods and Service Tax after revision had been after the revision in last earlier from four tier GST structure to three tier GST structure had reduced and decreased the burden of levitation of high rate of GST on the consumer goods and services falling under the different list of GST goods and service rate levitation list. That main focus and purpose of revision by the finance government three tier structure comprising of 5%, 18% and 40% is to rationale and reduce burden on the overall indirect tax structure. The GST revision in the tax structure had upgraded the economy by simplifying the tax rate structure to three slab system. The main benchmark of implementing GST into nation is to reduce and to minimise the burden of tax returns/payment of and to immune the tax payer from high amount of penalties and demands which by the said
 
revision had been meted with. The said GST revision by the Finance Government had been a milestone and for making the economy balanced, stable, globally recognised, regulated fiscal deficit amongst others for generating revenue and enhancement of GDP.