It’s a new era of taxation under GST is what the Indian government says nowadays. After all, the landmark Goods and Services tax has come into effect, bringing us closer to the dream of One Nation One Tax. However, there is much to be done and fort that, awareness needs to be generated among those who have not been following GST closely. So, we thought hard about five areas where you can have some doubts regarding the GST. So, these are some GST myths you should be wary of. In case your doubt does not appear here, do feel free to mention it in comments below and we will clear it for you:
GST Myths To Not Fall For
#1 – One rate for one product across India
Truth – The idea where this myth stems from is the same One Nation One Tax slogan. Some people have taken it to be the reality that a certain product, like petrol, will carry same price tag across India. Herein lies the problem though. There are a number of products on which the state levies vary from one region to another. This means that even after GST, there will be different pricing of a product. So, while you may get petrol in Delhi for Rs 65, you may not get it in Chandigarh for the same rate.
#2 – Prices of Goods and Services Will Increase
Truth – GST is neither a move to increase taxes or decrease them. It is a reform to help you see where your money has been going, in the name of tax, till date. If the prices of certain products have increased, they will have a marginal impact on your household budget. For example, an 18 per cent tax rate on a credit card bill worth Rs 100 is just Rs 18, which is three rupees more than what you paid earlier.
#3: GST is the Only Tax We Now Pay
Truth – If you believe in this statement, then you sadly are unaware of how taxation in India works. GST subsumes only central and state taxes. The local taxes, however, will still be charged and separately from GST. This has a created a big dispute in Tamil Nadu where Complex owners are sitting on a strike. Do read about that.
#4: Pay GST twice on Card Transactions
Truth – GST is a one-time tax. This means you will have to pay it only once, no matter at what point you pay it. On card transactions, you may have been told GST is charged twice. That may even be true but even if that is the case, you have to pay the tax only once. Mostly, this confusion has arisen as a result of increased taxes on credit card bills. However, you earlier used to pay 15 per cent tax. Now you have to 18 per cent. Do that math. You won’t even feel the bite. This is one of the GST myths which you should not even take seriously.
#5: Effects on Economic Growth Will Be Huge
Truth – In reality, GST is an engine of growth. However, India has organised and unorganised businesses. GST is a tool to convert the unorganised units into organised ones. This will help in monitoring of tax evaders and those indulging in malpractices. When such people are reduced in number, the benefit of GST will be there for everyone to see. However, this is a long term plan which will take time to gestate. So, there will be no immediate gains to be seen, unfortunately.