Finance

GST Payment: Myths busted

The last couple of years have brought in great economic changes into the country, with demonetization during the end of 2016, and GST taking over 2017. With the launch of the good and services tax (GST) this year, a lot of discussions are being done on the extent of its effectiveness, and if this will be a simpler form of taxation system in comparison to the previous one. This has led to the rise innumerable rumours about goods and service tax payment.

Here are some popular myths about GST, and the actual truth behind them-

1. One system of tax for the entire nation- This is definitely a myth!
While this was the initial idea of GST, at the time of it launch certain products like petrol, diesel and liquor were exempted from GST payment. Which is why petrol prices are still high in some states of the country while comparatively lower in other states.

2. Small business will face difficulties- No True!
Many were of the opinion that small business men will go through tough times with the launch of GST payment, primarily because they will have to switch to computerised billing. This is not true as manual billing is allowed under GST. Internet connection is only essential when the monthly return has to be filed. This can be easily done from a cyber-centre.

3. GST is the only direct form of tax, no other tax will be in place- This belief has proved to be a complete myth!
Primarily because GST is only charged instead of central and state taxes. Local body taxes are not included under GST payment. For example, the government of Tamil Nadu has permitted its local bodies to take a 30% tax on film tickets, excluding tax that needs to be given as GST, making movie tickets extremely expensive. This led to a strike in the state, which was called by cinema hall owners who were obviously not happy with this decision.

4. Prices will rise, creating inflation- This has also proved to be a myth!
While the government may have increased the tax rate on some goods, taxes have also been lowered in case of many consumer good items. Moreover, earlier there were a number of hidden taxes that one did not see in their bill. With the launch of GST, the full tax is now visible to the consumer. For instance, the prices of any chicken dish in Kerala should fall considerably, because earlier about 14.5% tax was charged on live chicken in the state, but now there is 0 tax on the same.

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