The main aim of GST is to bring in one nation one tax system but its effect on all industries will be slightly different. The GST council has finalized the rates of all goods in all categories and they expect to fill the loopholes in the current system. The GST changes implemented in 2017 to boost the Indian economy. As per source the tax rate under GST are set at 0%, 5%, 12%, 18% and 28% for various goods and services, and almost 50% of goods & services comes under 18% tax rate.
In consumers point of view, they would have pay more tax amount for most of the goods and the services they consume. We must see the impact of GST as long-term benefits. Fast moving consumer goods sector will get more benefit from GST due to big market. In the future once, the benefits of GST have been started in terms of higher credit and reduction in cascading effect, so that all the prices will come down and stabilize due to GST.
The impact of GST on food manufacturer is also one of the important thing to be noted. Some people use to visit their favourite hotels regularly. But due to impact of GST the prices of food have been increased and the peoples are not interested to pay an extra amount for the food. The starch manufacturers have also been affected by GST due to the revising of tax in hotels and in all categories.
The minimum GST will be 18% on all products. As per government the service tax liability with the credit of input VAT on goods consumed will get submerged into GST and irrespective of goods and services, the credit of input will be available for adjustment against the output liability.
The impact of GST rates on farm products such as edible oils, tea, coffee is seen as neutral. Wheat is a staple food for everybody. It is heartening to know that the government has exempted wheat and unbranded wheat products from GST. It’s mandatory to know about food bill separation of VAT, Service Tax, Service charge and GST.
The restaurant owners have more reasons to cheer in the GST regime. Under the VAT regime, the restaurant business owners did not have any option to adjust the output service tax liability with the credit of input VAT on goods consumed. Under the GST both the taxes will be come under GST and thus credit of input will be available for adjustment against the output liability irrespective of goods and services.
The implementation of GST will also favour the National Agricultural Market on merging all the different taxations on agricultural products. The ease of transportation of the agricultural good will improve the marketing and improve the virtual market growth.
GST will bring reasons to rejoice for both consumers and restaurant owners under the new regime and it is not flawless. GST can be progressive if the government differentiates products and services based on luxuries and necessities.