Yamala NNG Naidu
This analysis is all about impact of GST (Goods and Services Tax) on Indian economy in terms of job market. Before analyzing impact of GST on economy, we will have look on background and need of GST for India. Despite the success of VAT, there are still certain shortcomings in the structure of VAT, Both at the Centre and at the State level. Goods and service tax is a new story of VAT which gives a widespread setoff for input tax credit and subsuming many indirect taxes from state and national level with objective of eliminate the cascading impact of taxes on Production and distribution cost of goods and services and to creating a single, unified market that will benefit both corporate and the economy. Introduction the Goods and Services Tax (GST) is major step – an important step forward –in the globe of indirect tax reforms in India. GST is the only indirect tax that directly affects all sectors and sections of our economy like Food Industry, Construction Industry, FMCG Sector, Rail Sector, Financial Services, Information Technology, Impact on Small Enterprises and Job market as well, however our discussion only strict on to impact of GST on job market, as Job market linked with all above sectors in the economy and employment creation is major concern and challenging for the Government.
NEED OF GST
Main objective of GST is to eliminate the cascading impact of taxes on Production and distribution cost of goods and services and to creating a single, unified market that will benefit both corporate and the economy.We begin by elaborating on the important concept of – cascading effect of taxes. It is referred to as “taxes on taxes”. It is simple to illustrate – say Person X sells goods to Person Y after charging sales tax, and then Y re-sells those goods to Person Z after charging sales tax. While Person Y was computing his sales tax liability, he also included the sales tax paid on previous purchase, which is how it becomes a tax on tax.
IMPACT ON EMPLOYMENT
Implementation of GST creates millions of jobs but unfortunately Government delayed to pass it the in house. GST is clearly a long term strategy; it would lead to a higher output, more employment opportunities, and economic inclusion. The Goods and Service Tax reform is a good presentation with regard to its benefits to the common man in some ways. It has a lot many benefits to yield the common man and raise him from the undue burden of taxation. This could help in reducing the net MRP of the products for the consumers and increase in the sales for the manufacturers; this would definitely help in increasing the demand and supply of the goods which will eventually help in the economic growth. Such an economic development can definitely help in boosting up the employment and get the economic growth in geometric progression and GST definitely have some impact on the gains to the State Revenues which requires to be accepted to have a permanent balance in the economic situation of the country, that will require to maintain sound job market.GST provides lot more incentives to all sectors in the economy and invites the corporate houses to start up their business and that will creates a balance of growth, boost the overall economic development and sound economic environment which is require for accommodating more jobs like India where massive supply of cheap labour waiting for employment.
DIRECT BENEFIT TO MANUFACTURING- LOGISTICS AND MORE EMPLOYMENT CREATION:
The direct beneficiary of the GST bill would be manufacturers and logistic companies, including warehouse facilitators rather other industries. The implementation of GST will lead to a slight drop in prices of goods and also tax burden on the consumer. It will reduce the transit time, thus bringing more efficiency into the system and benefiting manufacturers. Moreover, sectors that deal with logistic would benefit as this new bill would encourage third-party logistics in India, reducing compliance cost, dropping number of warehouses and allowing tax credit across the supply chain, making it well-organized. Beside these, almost all the sectors would have indirect benefit from it and expend their operation units that will create a more employment.
The implementation of the goods and services tax (GST) in the country is long pending and now the government is moving fast for its implementation. The government plans to roll out GST from April 1, 2016, which could boost India’s GDP by 100-200 bps as per experts. Since creating jobs is our key challenge for the economy our new tax system should help to grow employment condition and I believe GST will made important progress on improving Job market condition in India.
Do you think CBDT should extend Tax Audit Report and relevant ITR Due Date? Please Comment, Vote, Retweet and Like.— Tax Guru (@taxguru_in) September 18, 2018