GST impact on Software Export:
The earlier tax regime in India was quite intricate due to multiple taxations, various compliance obligations, and tax cascading system. Now, after GST implementation, the taxation system is curbed especially in the Information Technology sector.
When we speak about the old taxation, the packaged software sale reckoned both service tax and VAT at 15% & 5%. Excise duty was also applied in cases of manufacturing IT products. But, now GST on IT sector attracts 18% on software services.
India is the biggest exporter of IT services and it is considered to be an important source of foreign exchange. The exports are zero rated and the paid input taxes are refunded. The supplier can export software services after paying IGST and claim for refund (OR) without paying IGST can export services under the letter of undertaking or bond.
GST Impact on Tourism:
Tourism is the third largest export avenue in terms of global earnings. Modern tourism is close to the socio-economic development. Tourism provides employment, income and foreign exchange for the country. We see here how GST impacts tourism sector.
Increased Revenue for State Government
Under GST the place of supply is shifted to the place of immovable property in case of Restaurant, Hotel, and Monuments for sightseeing. This will ultimately increase the revenue of the place where the immovable property is located. By GST the states start to have maximum tourist places, restaurants, and hotels and earn the maximum revenue by SGST which is equivalent to CGST. In terms of passenger travel, the station/port having outbound flights, train or local cab shall earn extensive revenue.
Uniformity in Taxes
A single tax GST replaces all multiple taxes and the GST tax lies between 16-18%. Due to the lower tax rates, many tourists will be attracted to India which eventually benefits the revenue of the Tourism sector.
Saving in Food and Beverage operations
When we consider hospitality industry, a part of tourism, the food and beverage companies are mostly benefited. Food and beverage bill do have multiple components which blow up the bills by 30- 35%. GST saves a maximum of 10-15% on the overall bill.
GST Impact on Advertising
The advertisement sector is subject to higher tax, which is increased from 15% to 18% under the Current GST regime. As CGST and SGST are levied, GST has its own complexities to operate a business in multiple states. Further, online matching of sales and purchases filed by the clients and vendors will make it operationally more complex.