What are the advantages and disadvantages of GST?

Advantages and Disadvantages of GST in India

• Highlights.
• GST aims to reduce corruption and tax evasion in India.
• GST will positively impact the country’s GDP in the long-run.
• GST’s price hike has negatively impacted the real estate market.
• Several segments are seen to witness a trade-off and complexity.

Are petroleum products under GST?

The GST Council on September 17 had decided to continue keeping petrol and diesel out of the GST purview, as subsuming the current excise duty and VAT (value-added tax) into one national rate will impact revenues.

Why is petroleum and alcohol out of GST?

Alcohol was not brought under the purview of GST regime primarily due to two reasons: To ensure that the State Governments continue to have a strong inflow of revenue (other than what they get from GST). It’s estimated that taxes on liquor and beer fetch the state governments nearly INR 90,000 crores annually.

What are the most likely advantages of implementing GST?

1. It will replace multiple taxes collected by multiple authorities and will this create a single market in India. 2. It will drastically reduce the ‘Current Account Deficit’ of India and will enable it to increase its foreign exchange reserves.

What are the different products of petroleum?

Well-known petroleum products include:

• fuels. Gasoline. Diesel fuel. Liquefied Petroleum Gas (LPG) fuel oil. Kerosene.
• Asphalt (mainly used in asphalt concrete)
• Paraffin wax.
• Tar.

Which states opposed inclusion of petrol in GST?

Several states including Kerala, Karnataka and Maharashtra have openly spoken against the idea of bringing petroleum products under GST.

What products are produced when petroleum is refined?

An oil refinery or petroleum refinery is an industrial process plant where petroleum (crude oil) is transformed and refined into useful products such as gasoline (petrol), diesel fuel, asphalt base, fuel oils, heating oil, kerosene, liquefied petroleum gas and petroleum naphtha.

What is the advantages of GST to citizens?

GST will make the goods competitive in domestic as well as international market. This means that consumer will get better goods and services at cheaper rates. This will decrease the consumer expenditure and will boost the Indian economy. Under GST all tobacco and tobacco related products will be subjected to taxation.

Can GST reduce Current Account Deficit?

GST is unlikely to ‘drastically’ reduce Current Account Deficit because of crude oil import and OPEC cartel that manipulates its prices. Hence statement 2 is incorrect. Similarly, GST is unlikely to enormously increase the size of our economy because the IMF projection is ~1-1.5\% addition in growth rate.

What does low tax to GDP ratio indicate?

If the tax to GDP ratio is low it shows a slow economic growth rate. The ratio represents that the government can finance its expenditure. A higher tax to GDP ratio means that an economy’s tax buoyancy is strong. A lower tax-to-GDP ratio puts pressure on the government to meet its fiscal deficit targets.

What is the impact of GST on petroleum products?

For instance, VAT on petroleum products is as high as 40\% in Maharashtra, contributing over ₹25,000 crore annually. By being able to levy VAT on these products, the state governments have control over their revenues. Bringing petroleum under GST takes away that control as the Centre is the one in charge of fixing the rate of GST.

Will GST bring down petrol and diesel prices across India?

At the moment, the Centre levies excise duty while states levy value added tax (VAT) at different rates, leading to different rates of petrol and diesel in different parts of the country. This could change if the Modi government manages to bring petroleum under GST. It could also make the rates uniform across the country and bring down prices.

What are the pros and cons of the GST?

GST has reduced the tax revenue of some states as they are now required to share revenues with the central government. The tax will be paid by the end consumer, which makes it a non-consumer-friendly tax system. Conclusively, the GST has both its pros and cons, and it is expected to bring a positive change in the tax system of India.

What are the taxes on petrol and diesel in India?

The Taxes on petrol and diesel, in the form of Excise Duty (levied by the Central govt) and VAT (by States) account for almost 40 to 50\% of the total cost price of petroleum products in India. So, the central govt and State Govts gets lot of revenue through Excise Duty and VAT/State Sales Tax respectively.