Nationwide GST implementation has been planned for July 01, 2017 and here we’re discussing whether this single tax will impact salaries and salaried people in a positive way or not.
Goods and Services Tax, also known as GST, is one of the most talked about taxes in India these days. And it deserves this, as it is the biggest tax reform undertaken since independence to ease compliance. This Goods and Services Tax is the single tax to promote Indian trade & industry and boost economic growth.
Since this single indirect tax covers many taxes in one at the state and centre level and will replace multiple levies right from manufacturer/supplier to consumer, so in first go it seems more relevant for businesses. The government has subsumed Central Excise Duty, Additional Excise Duty, Service Tax, Countervailing Duty, and Special Additional Duty at the Central level. Subsuming of Sales Tax, Entertainment Tax, Value Added Tax, Purchase Tax, Luxury Tax, Octroi Tax, and Taxes on lottery, gambling and betting is being done on State level to implement GST.So the question arises that in what manner GST will be beneficial for salaried people, as those who’re earning salaries will still pay their direct taxes in form of income tax or TDS which will be deducted from their salaries.
As a placement consultancy, we are often questioned whether the companies will give salary hikes for the introduction of GST bill or not. So, here we are with our research on GST facts and how this will impact salaried people.
Some experts say that due to GST, salaried people will have to pay more tax every time they’ll have their dinner outside or while shopping for daily necessities which are taxed differently on the GST slab. Whereas, some experts see GST as a long-term benefit plan. The design of GST is such that it will lead to substantial benefits accruing to salaried people or end consumers. With this single tax policy, the consumer will not have to give double taxes that are levied on them in the name of central government taxes and state taxes. Also, the consumers will be saved on the indiscriminately increasing rates of taxes that are levied by state governments. So, in this way GST is going to be a saviour in long-run, hence benefitting the salaried people.