One of the biggest tax reforms in India since independence, GST has come into being from the 1st of July, 2017. India has now adopted a four slab tax rate structure of 5, 12, 18, and 28 per cent taxes under the new GST regime. This change holds the promise of a reduction in corruption that is rampant in the country, thereby building a stronger economy for India. This is a major step on the path to a vision of ‘One Nation, One Tax’, and like any major change before it, the implementation of GST has resulted in a number of apprehensions among the populace regarding how it will affect their lives.
To do that, you need to first understand the most common myths surrounding GST. These are:
Truth: GST only appears to be higher than the earlier applicable taxes. Prior to GST, a number of ‘invisible taxes’ like excise duty were added to the price already before applying the tax. Now all these invisible taxes have been included within the GST, and are visible.
Truth: No. Irrespective of whether you pay your utility bills by card or by cash, the GST is only levied once.
Truth: Inaccurate. The invoices and receipts can be generated manually as well as by computer.
Truth: Not true. A retailer may conduct his business offline for the entire month. The only time they’d need the internet is when they want to file their GST (once a month).
Truth: Your provisional ID will be your final GSTIN number, so you can start up your business!
Truth: There is only one return that needs to be filed monthly and it has three parts. The first part of the return has to be filed by the dealer, while the other two parts are auto populated by the computer.
Truth: There are a lot of items like cars and two-wheelers that are getting cheaper, while a lot of services like eating out are going to get more expensive. It actually depends on the item in question, but the GST is going to affect things both ways.
Any tax reform is sure to bring a general upheaval in the economy. However, experts agree that this burden will soon dissipate. This leaves us with some waiting and watching on our hands, which would definitely go easier if we do our due research and analysis to understand this new tax regime, instead of believing every piece of information out there.
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