International Journal of Financial Management and Economics
Vol. 2, Issue 2 (2019)
Impact of GST (Goods and services tax) on consumers
Dr. G Suresh Babu and Dr. K Sridevi
In India, the maximum population is of the middle class and lower middle class where people either belong to service class or they depend on agriculture for their living. In this scenario, the most important question is what the impact of GST on consumers? There are lots of questions in the mind of consumers in these days such as, is there anything new for him or it’s like an old material in a new package? Is there any tax relaxation for him in new tax provisions or it will increase the prices of goods and services for him?
As soon as the GST came into effect, it would not be wrong to say that, this revolutionary move had impacted the lives of many. In fact, people are still struggling to understand what actually GST is all about. Moreover, for them, the picture is still not clear as what would be the GST impact on consumers and how it is bringing changes in the Indian economy. As and when a new reform or bill comes and a new law is imposed, it surely leaves its impact especially on the common man. It is ultimately the common man who is directly or indirectly affected by the implementation of any new tax.
Does the common man benefit from introduction of GST? This is a very tricky question and there is no definitive answer to this as for the producers and the government, the straight answer was YES, the GST will benefit them but for the common man it is not that simple. This is because GST will have different impact on different goods and services used by consumers. One thing is for certain that, it will bring down prices leading to increasing demand of goods and services which would benefit individual companies, but not everything will become cheaper.
Consumers play a vital role in any economy, as the consumer is placed last in the supply chain and as the user of such goods and services, it is important to know how consumer has an effect of GST. So, it is important to view the effects of GST from consumers stand point whose focus is primarily on pricing of various consumer products and services in GST.
Different tax experts and economists have given their opinion on the long term benefits of goods and services tax for India. Thus, there is a need to study the impact of GST on consumer regarding the GST in India.