GST (Goods and Services Tax) Merits and Demerits

The term GST refers to the phrase “good and Services Tax” .This Tax was introduced in india with a purpose to implement a single tax structure. Basically, it is one tax instead of all types of taxes on goods and services. Therefore a slogan becomes popular ‘one tax, one nation, one market ‘.It is expected to generate more tax revenue for the government through this. The other purpose to initiate this tax is to reduce tax evasion.

Structure of GST

Goods and services are categorized into different sections. Each section carries a different rate of tax. Below Tax rate as per categories of goods are mentioned;

  • For Sanitary napkins ,fortified milk,fresh fruits and vegetables tax rate is 0%.
  • For coffee ,tea,spices and electric vehicles tax rate is 5%.
  • For butter,frozen meat products, ayurvedic medicines and spectacles tax rate is 12%.
  • Pasta ,pastries and cakes and detergents tax rate is 18%.
  • Automobiles, dishwasher and vending machines tax rate is 28%.

Advantages of GST

  • As it is a uniform tax and applicable across all the parts of a country therefore it makes structure of tax simple.Instead of all indirect types of tax  a single tax imposed is called GST .
  • Also GST helps in tackling black money Basically it maintains transparency in business.
  • GST also enhances the business for domestic producers because it is a uniform type of tax across a the stages of a country.
  • GST also increases the revenue for government as there is a  higher lucidity in business.

Read : Benefits of GST

Disadvantages of GST

As every new system takes to implement properly. There could be a lot of chances to get problems while implementing that system and also many problems could be faced while it comes into existence. Similarly, GST also comprises some of the demerits which are mentioned below

GST  is yet not imposed on all types of goods. It is not imposed on goods like Electricity, alcohol, petrol, and diesel.

Also, the GST rate is not finally settled on different types of goods and services This generated uncertainty. This also produces hampers in decision-making activities and also hampers investment in the production process

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