Public opinion on India's GST reforms is divided, with mixed feelings surrounding their potential benefits and concerns about effective implementation. While some commenters express optimism about reduced tax rates and the possibility of boosting consumer spending and economic growth, others express skepticism regarding the government's ability to ensure that the benefits reach consumers. Frustration over perceived unfair taxation on the middle class and compliance difficulties also persists.

Government of India

Corporations

Middle Class

Consumers

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I believe the government wants people to spend more. If you cut down the gst alongside the tax slabs then people will spend more than they ever have. Now the sensible ones would be smart enough to grow their wealth and all but the majority of the crowd would buy lavish things yet again on EMI. Either way I think it's a win-win situation for the government as well.

Naive_Enthusiasm7084

Is this coming from any named and official government sources? If not it’s just an attempt to get favour and distract from the negative publicity the government is getting

Unfair_Fact_8258

I hope the hotel rooms falls into the 5% from 12%.
So much savings in travel and accommodation.

United-Advantage-906

Benefit:- Lower taxes, more money in pocket, good for consumers and economy 

Potential loss:- they cut both income tax and GST so revenues shortfall ??? 

They prolly expect higher growth to cover up for it but still don’t want it to be financed with debt or something

Wooden-Albatross-304

Nice, GST got a makeover — fewer slabs, same headache, just with better packaging.

InevitableBasic752

It's "Proposed" GST council will reject it

Practical_Whole_1975

This is incorrect. GST is passed on to the consumer as an addition to the base price. In fact, GST is the most straight forward tax you pay. If an item that previously had GST of 12%, is now taxed at 0%, your item price will reflect the 12% decrease (assuming supplier does not pocket the margin)

PM_me_ur_pain

Well mostly because they recover GST from consumers.

Nevertheless GST is not as bad as is being portrayed. Previously there was VAT, Excise Tax, Service Tax what not. We just didn't understand that. It was much much higher and differed from state to state. It was also difficult to transport goods from one state to another.

GST has simplified things a lot more than the pre gst era mess of taxes. But ultimately it's a tax and people will hate it, reasonably so.

Independent_Tour4500

Is this a joke? GST is collected from the pockets of the end user. It is factored into the MRP. Sure the business are the one who pay GST but they collect that amount from our pocket and for doing so they get refund on the GST paid for their purchase.

AltAccount_05

Oh, so the people buying stuff/services do not pay taxes, is that what you mean?!

This is such a low effort post


Edit : low effort is apparently allowed in this sub

6packBeerBelly

GST is collected from the end consumer. Businesses just pay it to the Government. Any GST that a business pays to another business is claimable.

If you buy something for Rs. 100 and GST is 5%, then you pay Rs. 105. The business pays the Rs. 5 to the government. If you aren't seeing GST on any product, then GST is already factored in and the price is inclusive of GST which again business pays to the government.

needanotheruname

This post is Why financial literacy is very important in High school education. 

GST increase will result in increased prices for consumers. Simple. The cost has to be recovered, it is recovered in sales.

MaleficentWolf7

Koi isko basic eco padhao re, businesses offering products or services eventually end up passing down the burden to the consumer, i.e. you and me. An entrepreneur is in producing stuff not because they turned patriotic listening to, ‘ mere desh ki dharti sona ugaley’, they’re in it cause they have profit motives and when taxes like GST end up biting into their profits, what do they do? They increase the prices of goods they offer.

bigdicknick07

Shall we start protest against the companies who burden us with something they need to pay. I see only one solution govt funded businesses in every sector.

divine__007

My friend operates a fairly decent sized consultancy services business. He used to collect and pay Service Tax on domestic invoices at a rate of 15% just before GST was introduced in July 2017 (Service Tax rate in India had seen a steady uptick since introductory rate of 8% in 2003, to 10.3% in 2010-12 to 12.36% 2012-15 to 14% in 2015 to 15% by 2017). Input Tax Credit (ITC) was allowed. No Service Tax was applicable on export of services. My friend's company had a 50-50% ratio between domestic and export invoices.

When GST was introduced in July 2017, GST on consulting services went up to 18% from 15% Service Tax on domestic invoices, and domestic clients refused to pay higher GST and my friend had to absorb the delta 3% into his margins. Some projects which were on thin margins didn't make sense so he had to drop those clients. Some other clients reconciled after a while and agreed to pay 18%.

Also, due to some initial confusion over Letter of Undertaking (LUT) to claim exemption under GST for export of services, he had to pay GST even on export of services in the first 2-3 months (again denting his margins) and had to apply for refund which took almost a year so he had some money stuck with Tax department there. But once LUT was filed and approved, GST exemption on export of services was resumed (same as in Service Tax regime) and it has been smooth since then. My friend increased share of export of services to 70-75% in first year of GST introduction to make up for challenges in domestic business (due to increase in GST to 18% from Service Tax of 15%). Also Indian Rupee depreciated against USD that year so it made exports more attractive financially. 

Nonetheless, his business grew over the next few years, domestic business also stabilized with many customers agreeing to pay 18% and overall 50-50% share of domestic vs export business was more or less restored by 2019. 

So, there was some disruption in his consulting business when GST was introduced in 2017 but it was resolved in the next 2 years and it hasn't posed a major challenge to his business since then.

disc_jockey77

GST was mostly rolled out as a good tax. Its aim was to simplify the tax regime and streamline all taxes like octroi, VAT, service tax etc as a single tax to ensure one stop compliance and reduce "tax on tax" (certain taxes were computed as a percentage of not just the value of goods but also another tax added on top of such value).

* But in certain cases, the rates were either outrageously high that they did not make it suitable for the businesses to operate since customers did not want to buy the product anymore at tha rate.
* Or, the GST could not be passed on to the consumer and it was biting into margins. 
* Alternatively, the GST paid could never be taken refund of if outputs (sales) were at a higher GST Rate than inputs (purchase) inspite of refund option being available.
* In some cases, department may have levied penalties on the business for not having collecting and depositing GST appropriately making it more lucrative to shut the business than operate it.

These are some reasons that are indicative of the above but I am unable to give you particular cases.

One example that I would cite is that in 17-18 (initial year of GST), restaurants irrespective of stature were asked to charge 18% of GST on their products. This meant that on Rs. 100, Rs. 18 was to be recovered from customers totalling to Rs. 118. This was becoming too expensive for customers and demand reduced. Moreover, some hoteliers who paid GST without explicitly recovering it from the clients had the shock of their lives when they saw the GST leaving their bank accounts. Many hoteliers protested and some had to close down shop.

Subsequently government announced 5% GST rate instead. However, the catch was no input tax credit would be allowed. Since most products (barring rent, services like pest control, maintenance, capital goods) came without GST, the hoteliers accepted this and have since worked that way.

These could be some reasons for the closure of businesses/growth mellowing down because of GST.

QuestionsAndIdeas

Businessman here. The ones who complain about GST are the ones who weren't pay tax or paying less tax since it makes evasion harder. It is much simpler than the earlier system. Previously central and state tax systems were different. Plus there was this nonsense called 'C-forms' which was a major pain in the ass. Cforms was basically a lower tax rate for interstate sales. But you had to follow up like mad to actually get the form from customers. If you didn't get it, the penalties were huge. 


Talks of people closing down due to GST is political talk. My company benefited quite a bit due to GST. Earlier I couldn't claim setoff against excise duty. That means it was a straight 10% loss whereas GST gives setoff on the entire tax amount. 

lolz714

One downside of GST I know is it requires registrations in each state you want to operate in, individually.

Only-Decent

GST was a trouble in the initial timeframe, like it can be expected from most such big reforms. The site was a problem (glitches), the returns would not always come in time (exporters had issues because their money was stuck), and most people complained really about the amount of paperwork and documentation.

- Frankly, it is just because indian small businesses were used to working without any documentation at all, and so they were finding it a little tedious. But this is all similar to international standards.

- companies that were purely working with cash, had to start paying taxes and this caused them trouble (esp. if their margins were small). But this is exactly what formalizing the economy means, and we are seeing the impact with the collections increase every month.

Infact, my biggest gripe with GST is that it is half-done. They should include fuel and alcohol in it, and reduce the number of slabs to just 3 slabs. Something like 0%, 12% and 28% should be enough. Some items price will increase and others decrease, but there will be more consistency.

SrN_007

Ruined is an exaggeration but troubled/irritated/harassed verbs will be correct.. GST has damaged federal structure.. States &amp; Local authorities have become begging bowl in front of central govt..

Some people are happy whose business was always in white.... but irrespective of anything, cost of following the law has gone up exponentially.. people are penalised heavily for minor issues

iamaxelrod

Speaking from experience. It did ruin my business. Current problems

1. Different GST slabs on different items. For example as a  manufacturer if I am making a wooden decorative items with metal nuts and bolts. These two component have two different GST slabs. It becomes difficult for small business to file gst due to this.

2. Monthly filing and on top of that a annual filing is a additional overhead. Very technical job for which you need to hire a accountant and pay him.

3. If you are a online seller and selling across multiple states then you need to file gst for each state. Even if your revenue is less than Rs. 5000. The gst limit of 40 lakh revenue does not apply to online sellers

4. How to handle gst for returned products. This is a big mess in itself

5.  There are many more which I will add later

Aadamkhor

Not sure about ruined, but it's come under the microscope. Especially with transactions.

knockyouout88

It's good for 99% of people, I live in haryana and due to the lower vat on products in Delhi people buy from there instead of us but after GST rates are the same and people now buy local.

[deleted]

GST isn’t perfect, but it’s better than the system preceding it.

EarthShaker07X

Only people dealing in black would say their businesses were ruined as sourcing material in black became alot more difficult. We do contract jobs and since gst we stopped accepting B2C orders and solely focused on B2B orders as 18% GST on material and labour cost doesn't bother them.

It also made accounting easier as we also do inter state job works.

Chip__wip

It's easier to administer Tax Code for collection of taxes of the code is simple and rates are well known


There is nothing simple about GST
The rates are all over the place and the whole input credit.system is failure for small + medium businesses

Sudden-Check-9634

If 20 lac limits still after 8 years is 20 lac it is harming us. Why so much compliance.

Longjumping-Site5478

&gt;whenever I see news and some posts, the most common allegation against the BJP government is GST. Some people say, 'I closed my business because of GST,' and 'GST ruined many companies, affecting my company's growth.'

Its a paid propaganda posts against BJP mostly. Mostly done by congress and soros team.Dont believe everything you see on social media. A self research and talking to real people will tell you the truth.

GST has certainly ruined the state's own cash flow for sure. Gorment is distributing income from a few states (well tax regulated and developed) to other states halting the ongoing growth earning states instead of trying to improve the tax system (&amp; corruption) of lagging states.

Awaara_soul

This cannot be answered simply.  There are two aspects. 

**1. Businesses are paying too much GST? Yes and No**

GST is collected by businesses when they sell services or products. So lets say I am a business man and I sell something for 100. Then I will collect GST on it depending upon the slab. So instead of 100 I will charge 100 + GST to the customer. Now this GST I pay back to the govt. Ideally this should not ruin the business. Problem is that businesses after collecting GST spends it and then struggle to pay back the GST. Little bit of disciple is required. 

Manufacturing companies on other hand have to pay more for raw materials as they are heavily taxed. 

  
**Consumers are paying too much? This is again yes and no**

I as a consumer of luxury and lifestyle am paying a lot more for items like cars, two wheelers, AC, clothes, apparels, electronics etc. 18 to 28% tax :-(

I as a buyer of home am paying a huge amount of tax. 18%. :-(

The consumers of mass items are not paying too much tax as they don't attract tax or are in 5% bracket. 

Thus the middle class and up end up coughing lot more GST tax apart from income tax. 

Thus consumption story in country is down. Hence demand is down hence companies get affected

PuzzleheadedFix1305

GST was introduced without any proper infrastructure and without any proper mass knowledge to common masses . Many may say that it has streamlined non tax paying business and hardend tax evasion . But as a business owner it has ruined small scale industries  government  mast understand digital adoption are not feasible for all moreover  tax slabs are so fucked up . small business are being bombarded with notices regarding mismatch

Latter-Grab7392

I'm a CA

No, GST has improved the ease of doing business.
Compliance  is much easier in GST.
GST is much more logical than the earlier taxation system.

There's much less opportunity for collecting bribes.

What is a small business according to you?

Idk about that but imposing GST on small businesses have resulted in grossly high inflation. Just watch the prices of Pani Puri or Jhal Muri. Today I get Rs 40 worth of Jhalmuri and back then it was 10. Pani Puri was 1 for each and now we get 2 for 10. Same thing goes for vegetables. Bought lemons Rs5 a piece. Used to get 3 for 5 back then. We do not even know how this shook the whole business industry.

India is initiating significant reforms to its Goods and Services Tax (GST) structure, aiming to simplify rates and reduce the tax burden on consumers. Prime Minister Modi announced plans to cut the top GST rate from 28% to 18%, promoting consumption ahead of the festive season.

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