How GST Impact GDP(Gross Domestic Product)

of India?

GST(Good and Services Tax)

GST describes for Good and Services Tax which is an essential regime
demanding in India.

It is the biggest indirect tax reform since independence.

It will be levied when a consumer will purchase a good or a service.

GST is a single indirect tax that combines many indirect taxes as Service tax,
Central Excise tax, customs tax, VAT tax etc.

The GST Bill will create a single market for more than a dozen state levies.

GDP(Gross Domestic Product)

Gross domestic product (GDP) is an economic measure of the market value

of all last goods and services produced in a time period (quarterly or yearly).
Titular GDP estimates are generally used to determine the economic
performance of whole country or a particular sector, just to make international
comparisons.
Titular GDP per capita does not reflect differences in the price of living and
the inflation rates of the countries; therefore using a GDP PPP per capita
basis is arguably more useful when comparing differences in living standards
between nations.

GST Impact GDP of India

The GST will bring about a significant change in the tax system by
redistributing the burden of taxation equitably between manufacturing and
services.
The Finance Commission had commissioned a study by NCAER to assess its
effect on GDP growth and exports.
The study explores the effect of GST on growth through direct cost reduction
as well as cost reduction of capital inputs.
Prefatory results indicate that the growth in GDP can be between 2-2.5% with
the implementation of a well-designed GST. The increase in exports can be
between 10-14%.

Positive Impact of GDP

There will be single tax system for all other Taxes such as VAT,Services
Tax,Excise duty,CST etc., which will make a unified market in terms of tax
implementation and the transaction of goods and services will be seamless
across the states.
After GST implementation the export of goods and services will become
competitive because of a null impact of cascading effects of taxes on goods
and products.
GST will be more transparent in comparison to the existing law provision so it
will generate more revenue to the Government and will be more effective in
reducing corruption at the same time.

Negative Impact on GDP

As the proposed GST rate is 18% which is more than current service tax rate
i.e. 15% (including cess), so the services will become costlier and it will lead
to inflation for a short time period.
As we know Real Estate also plays an most important role in Indian economy
but some economists thinks that GST will impact the Real Estate business
negatively as it will add up the additional 8-10 percent to the cost and detract
the demand about 12 percent.
to be continued

GST will applicable in the form of IGST, CGST AND SGST on the Center and
State Government, but some economists say that there is nothing new in the
form of GST and will replace Central Excise, VAT, CST, Service Tax etc.
Despite having some elements which are being expected to affect the
economy adversely there are also some factors which are being speculated to
make an positive impact on the economical conditions of the country.
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