In my view, in the initial stage, it will adversely affect the consumers with inflation in few categories while in few segment it will be beneficial. Overall for 3 -5 odd years, this system will increase inflation and affect consumers.

Thanks Manvendra, I am trying to have a thorough analysis as we already have some countries  who are this system .. It will help us to understand the whole scenario with different aspects..

I fully agree with the concern of Inflation as raised by Sh.Manvendra ji.....But at the same time,It is also correct that it will also replace around 17 indirect tax laws such as central sales tax, central excise tax, custom, CENVAT central value added tax, service tax etc.As a result, levies and compliance cost on all goods and services will also fall.It will definitely make our life better.

On practical side 2 parties get affected by tax system are entrepreneurs and customers. From entrepreneur side it is very frustrating to maintain communication with different tax departments, bribes and wastage of time. Now it will be easy to maintain only one kind of taxation in the books too. 

For customers price of one product will be same all over the country. 

While looking towards the benefits one major concern is also there as how the manufacturing states will recover their losses when they are going to loose a good sum of revenue. Central government support is there for a certain period but other ways has to explored to cover this gap of revenue for future. 

Dear Ritesh,

The consequences of the implementation of the Goods & Services Tax (GST) depend on the particular provisions of the GST law. For example, if the GST is reimbursable to business entities (as is often the case with sales taxes), the tax reform will reduce their cost basis. Thus, inflation should not be a direct consequence of the reform. Also, compliance costs can be expected to be lower if dealing with one tax as opposed to several different taxes.

Also, the current trend in international taxation is to tax consumption but to reduce the tax burden of income. If this is the goal of the new GST in India, lower taxation on income is to be expected which can be considered beneficial to individuals. 

Moreover, there are probably high administrative costs on part of the state, that will be reduced if the different taxes now at use become replaced by the GST. These savings can be used to ease other budgetary constraints and - at least in theory - to serve as an incentive for further tax reductions.

Paul