GST or Goods and Service Tax are considered as a multi step tax that is imposed on all the levels of product on value addition. Since a product undergoes multiple steps from the collection of raw material to the final product, and this GST will be imposed on all levels of the product formations. When a raw material undergoes a process it will add some value at each step to convert into a final product, the GST will be imposed on all the steps of value addition.
In Indian Tax system there are two types of taxes viz. direct tax and indirect tax. Direct taxes are those that are to be paid by the person n whom it is imposed like the tax paid by all earning common man. And the indirect tax is one that is imposed on someone and is paid by someone else. A form of indirect tax is VAT, which is originally imposed on the shopkeeper it has been transferred by him on the customers. At this point GST favors the common man.
The GST is an ultimate solution for the reduction of unnecessary indirect taxes that are burden on the common man. The GST after introduction directly or indirectly affects the common man. A common man will be surely benefitted by this GST law like after the introduction of GST there will be uniform system of tax and a number of indirect taxes will be removed.
The cost of manufacturing decreases with the decrease in indirect taxes. GST will result in reduction in cascading taxes and decreasing in the cost of products like FMCG products. The GST will ensure in increasing the tax collection from all the states and will help in raising the economic status of the states like Bihar, Jharkhand, and Odisha etc.
Since GST is a consumption based tax, thus on its implementation the tax will reduce in the regions where the product was manufactured and only be consumed form the region where it will be consumed. For the common man who runs SMEs or other small businesses the GST will bring benefit in terms of location bias as this will develop a even tax structure for various states.
Thus, in many ways the GST will benefit the common man. For more such amazing topics, you may visit us at http://www.rgscandcompany.com/