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Assignment-1

Name Akshay Bahety


Batch - 34th
Divison C
Roll no. 340304
Subject Business Economics
Topic : GST

GST
First of all we can understand some history and what GST is,
The Goods and Service Tax Bill or GST Bill, officially called as "The
Constitution (122nd Amendment) Bill, 2014", would be a Value added Tax
(VAT) to be implemented in India, from April 2017
GST stands for Goods and Service tax. This is levied on selling of domestic
goods and services for consumption
France was the first country to introduce GST in 1954. Worldwide, Almost
150 countries have introduced GST in one or the other form since now.
In 2000 Atal Bihari Vajpayee Empowered committee to make easy
implementation of GSt model.
There would be a Dual GST in India
i.e. taxation power lies with both by the Centre and the State to levy the
taxes on the Goods

Q1) Will the burden of GST be shared between the consumers and producers?
Ans) First of all GST burden will fall on the shoulders of consumer as taxes
are been transferred as it is an indirect tax and its freely been transferred
The tax that consumers have to bear will be certain and it is expected that
GST would reduce the average tax burdens on the consumers
It will mostly substitute all indirect taxes levied on goods and services by
the Central and State governments in India

Q2) what factors will this depend on?

Ans)Presently there are many taxes that includes SALES TAX,EXCISE


DUTY,SERVICE TAX, & CUSTOM DUTY which is very complex and time consuming
activities so basically to save time and cost GST was implemented ,which is
approved by president of India on 3rd august 2016 & GST will be implemented by
FY2017.

Q3) should some items be exception to the rule? Why?

Ans) Yes, there are some items which should be exception to the GST Bill. Those
goods which are consumed by poor like fruits, Vegetables, salt, grain, coarse
fabric & common items b/w centre & state including bread, egg, milk,
vegetables, books & Salt should be exempted as these all things are necessity
for middle class or say poor people. This goods are considered to be of national
importance and should be exempted from tax. As such the price of each & every
commodity is too high for them & thereafter imposing tax on those goods would

make their life miserable. As coconut oil in Kerala & sattu in Bihar are local
importance and are exempted from the list. At present, the centre and the
states arrived at a consensus to keep the exemptions to less than 100.

Q4) Explain your stand by taking any one item from each of the following
categories.
1) Processed Foods:
As india already has over 6% food inflation, India cannot afford to have high
taxes so the rate of GST on processed foods should be kept low or at zero. If
taxes are implemented food prices will rise & ultimately lower class people as
today 67% population is rural population they will ultimately suffer as there are
many cases of suicide as, 21.9% population in India is under poverty line i.e they
cannot earn 125rs. Per day. As increase in price due to introduction of gst will
have ultimate sufferance for poor people.
2. Consumer Durables
Ans) The passing of GST Bill for the consumer goods will reduce the ultimate cost
in 2017.
Luxury cars, FMCG products, consumer durables, electronics items and
readymade garments will become cheaper as a result of passing GST bill.
GST regime will reduce the price differential between organised or say branded
vs non branded goods, for instance say in tiles & ply boards price difference b/w
branded & non branded goods is almost 10-15% , so as the new tax is
implemented more consumer may shift to branded products as the price
difference reduces.
3. Services
Ans) Generally service industry currently imposes 15% tax, after imposition of
GST it can rise upto 18-22% tax depending on the rate of GST council agrees
in.For instance Going on an air trip which is costing rs.8,000 for which earlier tax
would be rs.1200, would be increased if we take 20% tax which would be
rs.1,600 so straightaway there is increase in 400rs. Of tax. Thus any services
ranging from restaurants bills, expenditure on staying in hotels, airplane journey
etc. would ultimately become costlier after the implementation of GST. Insurance
products will also ultimately shoot up.