How the GST Implementation Will Affect the ‘Future of India’
The GST remains a giant step forward for the country, but let’s also remember the future that will be driven by the children of today. And the GST, in its current form, has the potential to put brakes on a child’s development.
Etching its place in the economic history of India, the Goods and Service Tax, referred to as GST has been finalized and will now be implemented effective 1st July 2017. The GST was conceptualized to facilitate efficiency and ease by significantly reducing the cost of compliance and transaction, and integrating multiple taxes into a single tax. It is, clearly, India’s most important tax reform ever, intended to ultimately benefit the common man; the larger question, however is – to what extent?
The tax brackets that have been finalized can prove to be counterproductive to various sectors and industries. Take the toy industry for example; the increase in the overall tax rate and multiple rates within the toy category will impact the sector negatively.
The GST remains a giant step forward for the country, but let’s also remember the future that will be driven by the children of today. And the GST, in its current form, has the potential to put brakes on a child’s development. To put things in perspective, it is imperative to understand that for various toy makers, there is an emphasis on developing toys that positively affect the growth of a child – be it in the form of building cognitive and motor skills or aiding learning techniques. Child psychologists have propagated that Toys and Games come with intrinsic value that adds to the overall learning and development of children. Education is exempt from the high taxation but products related to children are taxed across categories. Stationary like Fountain Ink Pens, Pencils and Children’s Coloring Books and sports goods fall under the 12% bracket. Electronic Toys are now part of the 18% bracket, and most importantly, educational toys like Scrabble or Chess are now levied with the highest tax of 28% (previously exempt). The proposed three rates does not align with the underlying principle of GST of one product group, one rate.
Second, retail and e-commerce will have an adverse effect on the price increase that manufacturers will have to undertake. Increased price will increase dependence on counterfeit and low quality products. This will be detrimental to the category and have far reaching effects on children and parents alike.
For a country to thrive there needs to be standard taxation across the category, where the rates are fixed considering the developmental needs of its growing children.
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