GST is the Goods and Services Tax. It will be enforced starting 1st July 2017. This tax is primarily to remove all other indirect taxes that people pay. For example: If a product is manufactured at one place, and is sold in another state, there are a series of taxes applicable on the product. The export tax, the value added tax, etc. With GST coming into picture, there would be only one tax to be paid.
It means that if a product is taxed at 18%, it will include both central government’s taxes and state government’s taxes. When a product moves from one state to another, we will not have to pay other taxes, such a import tax, etc.
This will benefit people in numerous ways:
1. Business made easier: Doing a business would be easier, because the businessmen will not have to worry about doing a business from a specific place. The tax is going to be on the final product and no other state taxes are going to be applied.
2. Uniformity of taxes: As GST will be enforced, all other value added taxes will vanish.
3. No hidden costs: There would be no other indirect taxes to be paid, which would reduce the hidden costs of doing business.