Economy Posted on June 6, 2017 by Arun Kumar GS123 Q. Discuss five expected benefits as well as three apprehensions related to the new GST system. [ 100 words, 5 marks] Tags: current affairsGS Arun Kumar M.Sc.(Psy), UGC( NET), R&T Exp: 20+ Yrs, Founder -Beautiful Mind , Delhi Next How did my student score 161 marks in essay in CSE 2016 ? Previous How to deal with failure in the IAS exams ? You may also like... Indian Economy- Land Reform Split or altered reality Polity 4 Responses Comments4 Pingbacks0 Alice says: June 8, 2017 at 4:05 pm Expected benefits of the GST 1. It would ensure that indirect tax rates and structures are common across the country,thereby increasing certainty and ease of doing business. 2. It would result in minimal cascading of taxes,which would reduce hidden costs of doing business. 3. GST will result in better tax compliance due to robust IT infrastructure. 4. Because of efficiency gains and prevention of leakages , the overall tax burden on most commodities will come down, which will benefit consumer. 5. GST is expected to decrease the cost of collection of tax revenues of the govt and will therefore lead to higher revenue efficiency. Apprehensions related to the GST 1. Critics argue that GST would impact negatively on the real estate market.it would add up to 8% to the cost of new homes and reduce demand by 12% . 2. Telecom industry fears to suffer as is already triggered by the coming up of jio. Reply Arun Kumar says: June 9, 2017 at 10:16 am Good but write more on criticism like different slab issues, petroleum products related issues etc.. 3 /5 marks Reply Poorva Singh says: June 8, 2017 at 4:08 pm GST is one of the biggest tax reforms that post-independence is aimed at simplifying the complicated indirect tax regime. Some of the benefits of GST are as follows: 1. It will create a common Indian market, improve tax compliance, boost investment and high revenue collection. 2. There will be no hidden taxes and the cost of doing business will be lower. 3. It will benefit people as prices will come down which in turn will help companies as consumption level will increase. 4. In the GST system, all the taxes are integrated, it would divide the taxation burden equitably between manufacturing and services. 5. GST will also help to build transparent and corruption free tax administration. Some of the apprehensions related to GST are: 1. GST would impact real estate market negatively. It would add up to 8 per cent to the cost of new homes and reduce demand by about 12 per cent. 2. The aviation industry will be affected. Service taxes on airfares currently range from 6 to 9 per cent. After GST, this rate wilk increase above 15 percent and double the tax rate. 3. IT companies have adopted a strategy of spreading their operations and stationing their majority workforces where the cost of operation is low like -chennai, Bangalore. The GST may lead to increasing costs of operations of their most cost-effective deliver center. Reply Arun Kumar says: June 9, 2017 at 10:21 am Good Hike in banking cost due to 18% tax is a greater concern than aviation..? 3.5 marks Reply Leave a Reply Cancel replyYour email address will not be published. Required fields are marked *Comment Name * Email * Website This site uses Akismet to reduce spam. Learn how your comment data is processed.