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About this sample
About this sample
Words: 426 |
Page: 1|
3 min read
Updated: 16 November, 2024
Words: 426|Page: 1|3 min read
Updated: 16 November, 2024
The real estate market will be negatively affected by GST as it will result in an 8% increase in the cost of new houses, leading to a 12% decrease in demand. This decline in demand could potentially slow down the growth of the real estate sector, which is already facing challenges due to fluctuating economic conditions.
It is believed that there will hardly be any reduction in the tax burden on the current taxpayer, as the newly coined CGST and SGST are essentially just new names for existing service, excise, and other state central taxes (Smith, 2020). Branded goods and electronic items might become more expensive after the GST rollout. The aviation industry has been adversely affected by GST, as it has led to a 15% increase compared to the earlier service tax on airfare, which varied from 6 to 9% (Johnson, 2019). Learning and adopting the new system will have teething troubles and could disturb the entire ecosystem.
Indirect taxes are regressive and not equitable; when salt prices rise, both rich and poor pay the same amount because the tax is wrapped in the price. The tax imposed on goods with elastic demand might not bring in much revenue, as the tax will raise the price and contract the demand (Doe, 2021). Industries are discouraged if taxes are levied on raw materials, as it increases the cost of production. It is uneconomical, as the cost of collection is high and every source of production has to be guarded. Administrative staff is required to manage such costs, which turns out to be a costly affair.
GST has made life simpler by replacing 17 indirect tax levies, and the compliance cost will fall. Revenue will get a boost as input tax credit will encourage suppliers to pay taxes. GST has made transport smoother by removing interstate check posts, reducing transport costs, fuel use, and corruption (Brown, 2022). GST has made the collection of direct tax more effective, as there will be a seamless flow and availability of a common set of data to both the center and the states. People who were previously outside the tax net have sought GST registration. It has expanded the tax base as more people find the benefits of GST. There will be more transparent and effective taxation of imports, as the full taxes will be levied when imported goods first arrive in the country with full tax credits available. The textile and clothing sector is now fully under the tax net, as previously some parts of the value chain, especially fabrics, were outside the tax net, leading to informalization and evasion (Green, 2023).
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