The following post is a sponsored post.
The goods and services tax or GST is likely to get rolled out from July 1’2017. The introduction of this new and unified tax system or GST was imperative, given the current complicated tax structure in the country. Looking at the bigger picture, GST is going to be one of the biggest boon for Indian economy as after the GST implementation the growth in the GDP of India is expected to increase by at least 2% as per the latest GST news. Since GST is expected to convert many non-tax payers to tax payers, a major benefit expected is that it will increase the tax revenue for the government and lower the tax burden for many.
According to the GST news, the traders are not yet comfortable with the new form of taxation and they are finding it difficult to adopt the change. As per some sources, government is receiving requests from industries to delay the implementation of GST; however this doesn’t seem likely to happen.
Impact on wholesalers and retailers
Under the current scenario, most of the wholesalers and retailers do not pay taxes as there is no mechanism which can track their correct amount of sales and purchase. Since there is no invoice or bill, the question of any document of sale and purchase in writing does not arise. After the implementation of GST, they will have to present bills digitally where the GST platform will monitor them as per the latest GST news. Since the entire supply chain will be monitored, tax evasion by the wholesalers and retailers will become much less likely. A few months earlier, the retailers were hit by demonetization when many companies suffered drop in sales due to low customer demand and they had to de stock. Many of them consider GST to be yet another setback.
However, the benefits GST has to offer over shadows the initial hesitation of GST acceptance. IF the GST news coming in is to be believed, the new tax structure is likely to impact wholesalers and retailers in a positive way. GST will eradicate the chances of double taxation and hence lower the overall tax burden. Also, since the base of the tax payers will increase, it will reduce the overall tax rate. GST is going to bring a uniform taxation system across the states of the country and hence the flow of goods and services across the state will be smoother and easier due to reduced transportation and administrative cost. GST will also smoothen the flow of goods and services to make the entire supply chain organized and structured.
GST is an integrated tax that benefits the wholesaler as it eradicates the cascading effects of tax and automates the process of compliance making it easier. GST also removes the octroi charges hence is a big relief to the wholesalers. GST news from reliable sources points out that the new regime will impact the retailers favorably as it will reduce overall indirect taxes, increase the efficiency of the supply chain, create a unified input tax credit, create seamless integration of goods and services, etc.
GST will also bring more suppliers, distributors and vendors in market due to easy procurement of goods, easy availability of raw materials and a better supply. Legal news in India points out that a simple taxation or GST will help in fewer compliance burdens, transparency in business, faster transportation, better logistics, improved supply chain, and better margins. Retailers will also be benefitted as the cost of the basic and essential commodities are expected to reduce after GST.
The retailers and wholesalers who will not be able to comply with the new GST might suffer. As the GST news recommends, they must fall in line as soon as possible and get digital to make themselves registered and compliant.
Stay updated with the latest business news in India on BloombergQuint.
Read more on the latest GST tax rates in India.