According to assessment during the implementation of GST in 2014, there were a little more than 12 lakh service taxpayers in the country. Interestingly, now the number has almost gone up over 18 lakh across different slabs of GST. This data is based on the number of GST filings last year.
With the tax department estimating a large number of delays or non-disclosure of GST, it becomes important to understand how GST is impacting various sectors in India.
GST or Goods and Service Tax is levied on all manufacturing businesses and service providers in India. Replacing the older system of individual taxes by Central and State Governments, this streamlines the taxation system much more.
The various impacts of this taxation system on different industries are discussed below –
From lines of credit like business loans, home loans, personal loans, etc. to investment options like fixed deposits, the financial sector offers numerous types of services to the economy.
With the implementation of GST, a certain increase in credit pool has been observed. A major reason for this rise can be traced to the fall in prices due to the implementation of GST and consequent growth in asset acquiring even with credit accounts.
Learning GST meaning and its impact, it is important to understand that rates of interest on loans went up. This can be owed to the higher cost of functioning for financial institutions.
The manufacturing industry is one of the several which have immensely gained from GST. Previously, numerous taxes were levied on manufactured products. Additional taxes were also levied on them during transport across state lines.
GST has impacted the manufacturing sector by reducing the universal tax on the end price. The decrease in prices has boosted the market for the manufacturing sector.
Overall, the impact of Goods and Service Tax has been beneficial in the manufacturing industry, though a reason for concern has been the original tax, which stands at an additional 1%.
GST for automobiles has been standardized at 28%. This has had a mixed impact on the industry as a whole.
While larger automobiles have majorly benefitted from the GST tax rate in India, medium and smaller vehicles have had a reduction in sales. This is attributed to the higher selling price due to GST.
However, the commercial vehicles sector has benefitted significantly from the implementation of GST.
It is important for entrepreneurs in this industry to know all about GST, especially in case of the transfer of automobiles across state lines.
While considering what is GST and its impact on the telecom sector, the stand-out point is that there has been an increment of 3% tax. The direct impact of GST on the telecom sector is that the cost of call charges along with all related services has gone up.
Implementation of GST has also necessitated technological upgrades. For several industries, it can be difficult to directly implement all the required upgrades without financial assistance. Considering about GST and its impact, this upgrade cost must also be taken into account.
In case any business organization finds it difficult to implement these mandatory upgrades, they can avail of financial assistance. Several financial institutions like Bajaj Finserv offer financing options specifically for such purposes.
Implementation of the Goods and Service Tax has an overall introduced convenience for customers of products and services. While in some cases the price has marginally gone up, buyers and sellers now only have a single tax to pay.
As for businesses, it is essential for them to know the complete guide on GST registration procedure in India. Delay on GST filing can incur any penalty charges.