India’s economy is largely dependent on its earning population; a large percentage of the salaried people in India fall into the middle-class category. This section of the population is the one that is most affected whenever there is a change in the government policies. Right from the time when the GST was announced by the Central Government of India up until the time, it was implemented, and even after, the revolutionary financial reform bill has been discussed by everyone. There has been a lot of discussion on how the new bill will affect the common man and what would be its effect on the people who mainly depend on their monthly salaries for livelihood. Also, there has been a lot of speculation on how the GST would benefit the businessmen in the country and its implications on the national economy in general. So without any further ado, lets us know how the new bill will affect the salaried class, the business owners and the economy in general.
Impact of GST on the salaried employees
The Goods and service tax bill is of great relevance to the salaried employees because the tax rates for restaurants, shopping, construction and entertainment has increased, however, at the same time, the expenses on the household items like food grains decreased. With the new bill coming into effect, the purchase for all the salaried people is sure to become simpler than ever before. All the previous taxes have been replaced by a single tax that is GST. It implies that people would no longer need to pay different taxes like the entertainment tax, VAT, service tax or the luxury tax. GST being an indirect tax, the salaried class will not be affected by the GST in a bad way; instead, they can now enjoy the benefits of reduced household expenses.
As per the guidelines laid out by the Central Board of Excise and Customs on the GST, the services of the lawyers and the law firms to any business having an annual turnover of up to 20 Lakhs INR would get a tax exemption under the indirect tax bracket. The turnover threshold is Rs 10 lakh in the case of northeastern states.
- Impact of GST on the Indian economy
GST comes as a refreshing change to the age-old taxation system in India. People have been bearing the brunt of the indirect taxes for a long time, but with the GST in place now, the collection of taxes will considerably improve, which would have a positive impact on the development of the economy. Here are a few direct benefits that GST is likely to bring to the economy as suggested by the financial gurus:
- The GDP is likely to grow by 1% to 2%
- The GST is likely to have a great impact on generating new employment opportunities as well as increase the production.
- With the implementation of the new bill, the experts suggest that the government’s revenue will increase and also the fiscal deficit will reduce.