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How will GST affect my taxation as a common man?
Who do you mean when you call yourself a “common man”?
All common men also are into businesses right? Everyone has a source of income, and from that income they either spend or save it. GST is going to affect all of this. Therefore, when you call yourself a common man, you need to understand that you will be affected in a multiple ways. Let us understand how:
How will it affect your incomes?
If you are in a business, GST will definitely knock your doors. You will need to be friendly with this tax. Regardless of what you do – whether you’re selling something, or making something, or providing a service – GST will be applicable to you. Following are the major impacts of GST for your business:
- Many of your customers will now insist on purchasing with an invoice, because they need the credit of GST.
- A lot of your business expenses (such as transportation, contracts etc) will now be eligible for set-off against your output taxes
- Compliance will be limited. Instead of dealing with a hundred tax offices, you will need to deal only with two tax departments.
How will it affect your expenses?
You are confronted with indirect taxes (service tax, VAT, excise) almost on daily basis because these taxes are applicable on all your expenses. In this area also, the introduction of GST will affect you in many ways:
- There will be a single tax for all transactions. Going to movies, eating out at restaurants, buying from the grocery store – GST everywhere!
- Whether the prices rise or fall will depend largely on the rate of GST, which is not announced as of now. Stay tuned.
- Petroleum is not covered in GST at first. So don’t expect the fuel prices to change much (at least not on the back of GST rates)
Other indirect effects of GST
There are some other indirect effects of GST which are going to affect you. Due to seamless allowance of credits, people are going to insist on asking for bills, as a result of which unaccounted (black) money will be reduced. Further to this, scope for manipulation and corruption is also going to come down. As a common man, of course you will be affected when the economy develops.
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