Gst Impact On Business

THE IMPACT OF GST ON BUSINESS, CONSUMERS, GOVERNMENT AND ECONOMIES

Implementation of GST will have several impacts on business, consumers and government. The impact of GST on business is business become more competitive because GST on input is claimable and it has no longer a business cost. Second impact on business is an export becomes more competitive because it no elements of tax embedded. In business GST is self-policing not like SST less human intervention with the authorities. A last impact of GST on business is no matching between input and output, all purchases and acquisition are readily claimable.

A second impact of GST is on consumers. The impacts are relieving tax burden of consumers, control excessive profiteering and transparent

It is good for the development of the country. But GST make many people worry about it implement because GST may increasing the burden for citizen. This is because the implementation of GST replaces the existing sales and services tax that already have. SST has the higher rate compare to the GST. Therefore, government saying the implementation of GST would not hurt the people because it rate much lower than SST.

Besides that, GST also did not burden the business because the tax elements would not become the part of production costs as the GST paid on the inputs by the business is claimable. The cost of production of the business did not affect the input tax.

Apart from that, according to the government the introduction of the GST is proven to be better tax system because it can enhance the effectiveness and efficiency of the existing taxation system by eliminates the existing Sales and Services tax (SST) that have weakness such as compounding effect, transfer pricing value and value shifting. This is because the GST will be conducted in a fully computerized environment. In addition, GST also provide fairness and equality on the business involved such as wholesaling, manufacturing, service sectors or retailing and it provide better transparency to consumers unlike the present sales

Other than that, there might cause the inflation effect if the GST applied to all prices of goods. GST also might have continuous effect price of products go up. The demand of the market might decrease due to the limited purchasing power of household. When the products prices and high cost of living, people may not willing to spend so much because of the limited income. Although the government claims that the GST would not hurt business but in fact it will hurt the businesses too. The low demand in the market may cause decrease of supply the product. When the shortage of supply the businesses have to cut down the expenses such as labor cost due to the lower output needed and it will increases the rate of