LET’S GO SHOPPING TO UNDERSTAND HOW GST HELPS z
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INTRODUCTION
Let’s say you’ve gone to a cloth retailer’s store along with your daughter and your little one has liked a dress. The first question you will ask the retailer is ‘How much does the dress cost?’. Let’s assume the retailer says Rs. 207.63. This price is fixed under the non-GST regime. Do you know how much the same dress would cost in the GST regime?
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The exact same dress would cost Rs. 166 in the GST regime. You save almost a whopping 20% under the GST regime, which is Rs. 41.63.
Let’s find out how by quickly going through the following table:
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This is an example with imaginary numbers created just for facilitating easier understanding of GST benefits
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In simple words, as seen in the table, under the GST regime, you are not taxed on taxes already paid. In fact, at each level, the intermediary can become the beneficiary of the taxes paid by the previous intermediary through availing exemption.
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Consequently, the cost at which the DRESS reaches YOU, the CUSTOMER is just Rs. 166. This is just not the case in the nonGST regime where taxes are calculated on an already taxed amount at each level of intermediation. This is just a small example. Just imagine the impact GST can have on inflation in the long run through such a powerful tax regime.
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