GST stands for Goods and Services Tax and it’s a new tax structure introduced by the Government of India that will fundamentally alter how you do business on- and offline in India. On July 1, 2017, the much-anticipated GST went into existence. No longer is the tax system in India a collection of state taxes or the pan-Indian service tax. It’s now one single and cohesive unit. In this article, we will list some of the advantages of GST.
- Ease of compliance
Although there are several advantages of GST as a whole, compliance is one of the prime advantages that cannot be ignored. Compliance becomes easy when entire taxpayer services such as registrations, returns, payments and many more are made available online to the taxpayers. Due to GSTN and solutions like emsigner, all GST related activities can now be performed online and from anywhere, anytime. Visit here to know more.
- Uniform tax structures
Certainty, in terms of indirect taxes, is a big deal. Not just for taxpayers but also for tax administrators and revenue authorities alike. With nationwide uniformity in taxes due to GST, the effect of taxes based on the choice of place of business has been neutralised.
- Greater efficiency
GST is expected to cut the costs of collecting tax revenues, which will translate into higher Revenue efficiency on the government’s part. Having a good revenue efficiency is considered as one of the characteristics of any tax system. Hence this substantiates even further that GST is indeed good for the country and the people.
- Easier to manage and administer
GST will replace multiple indirect taxes levied at both the Centre and State levels, thus making administration more streamlined, easier, and less costly. This is further ensured due to the backing of a stable IT system.
- Decrease in overall tax
The final price paid at the cash register will include only the GST charged by the last dealer or retailer in the supply chain. Since GST is charged only when goods are sold, you will have set-offs for all the GST charges at previous stages in the supply chain.
GST will also ensure that goods and services move freely from one state to another without any barriers or check posts, making our country one big market. This will allow the movement of goods from manufacturers directly to retailers and consumers, curbing intermediaries who increase costs due to multiple layers of taxation, levies and other taxes.
GST will benefit traders in two ways. First, traders who are presently paying taxes on both sides (on value addition as well as on stock transfer) will have set off of input taxes paid at each stage and be able to save taxes on both sides. Second, they may be able to avail input credit on stock transferred to repackagers or re-branders.
To sum up, the Goods and services tax (GST) will simplify, rationalise and harmonise the diverse indirect tax laws in the country. It would help in reducing compliance costs, eliminating tax-on-tax and double taxation on goods and services at different stages of production and distribution, checking to a cascade of taxes. By subsuming all Central as well as State levies, it is expected to offer a transparent, seamless national market for goods and services.
Hence it is extremely advantageous for you whether you are a consumer or a business owner.