The GST is a uniform indirect tax which has replaced all central and state indirect taxes, treating whole of India as a single market. The most significant aspect of GST is that, it follows a uniform tax rule for specific products, throughout India.
The anti-profiteering clause has been inserted in the GST Act to protect the interest of the consumers. India is a developing nation, still struggling with the issue of unemployment.
A marginal increase in the cost of borrowing is also applicable for home loans, auto loans and personal loans. GST in upcoming will prove a game changer and will certainly broaden India's tax base.
However, experts are hopeful that the increase in cost may not last in the long run as banks will pass on the benefit of input tax credit, under GST, to their customers.
However, we may be entitled to an additional credit against taxes that have been subsumed under GST. Under GST, there is an option for small businesses to lower taxes. We pay service tax on various services availed from banks, mutual fund and insurance companies. GST has brought all of them under a single roof and has reduced their cascading effect.
Furthermore, the imposition happens with the recommendation of a federal council. GST has been proposed in the Indian Parliament few months back and economists are deep diving to study its implications and feasibility of implementation throughout the country.
Service tax is an indirect tax and the Central Board of Excise and Customs CBEC is responsible for the formulation of policies related to levying and collecting indirect taxes.