GST : New Choices

By Atisha, SY

GST was levied on the goods and services replacing the direct taxes which indicates that there would be just one tax levied on all products and all services (indirect tax), simply, one indirect tax for the whole nation.

While explaining this concept of GST to her child, Pallavi Joshi says,

“ It’s just the way you celebrate your birthday in your school, let’s say that you have your birthday tomorrow and for which your father gets chocolates, so that you could distribute those in your class, so the next day when you leave your house you meet our neighbours and handover a chocolate to her and you see your friend Tinku with her, so you give it to him too. As soon as you reach school, your father drops you off at the gate and wishes you happy birthday and leaves, the guard at the gate overhears that, so you give him a chocolate too, later when you go to the class, the teacher announces in the class that its your birthday and you distribute chocolates to everyone, however your friend Rosy is absent today, so she doesn’t get the chocolate. But your friend Tinku gets one more because he is in your class.

Taxes are nothing but this, which is to say that our neighbour got the local tax, the guard in your school received the entry tax, the friends in your class received service tax and Tinku received surcharge. But Rosy? she got nothing.

 These were the taxes levied previously, let’s see what’s GST?

Let’s say that the Principal has made a new rule that anyone who wants to celebrate their birthdays, will give their chocolates to him and he will distribute those amongst the students, which is good as :

It reduces the time it took you to distribute those chocolates separately. Everyone gets the chocolates properly.

This is GST, so rather paying different taxes on different commodities, services, only one tax is to be paid. But of course this causes the loss of a Tinku.”

Having a look over GST, how it benefits the consumers, under GST, there would be only one tax from the manufacturer to the consumer, leading to transparency of taxes paid at different levels of buyers and sellers. It also provides a certain percentage of refund on in all levels from the manufacturer except the final retail level. This minimizes the cascading of taxes to zero for all level apart from final consumer transaction. This also leads to lesser final amount paid by the consumer as the cascaded tax does not need to be paid. This eliminates the motivation for hiding income to avoid taxes which results in more people paying taxes. The budget is balanced as although the tax paid by each individual person is lessened, the number of people paying those taxes increases. Hence ,GST provides relief to all tires from manufacturers and retailers to the consumers.

There are several advantages and disadvantages when it comes to a new concept which has been accepted by the people, as well as the government. GST is one of them. I just hope that this one has more advantages than disadvantages when it comes from a lookout from the people’s point of view.

-Suchitra H., FYBA