GST i.e. Goods and Services Tax as the name suggests is the tax levied on the supply of goods or services or both in India. The Goods and Services Tax will provide the much-needed stimulant for economic growth in India by transforming the existing base of indirect taxation towards the free flow of goods and services. GST was successfully implemented on 01st July 2017, as a destination based consumption tax. There are different rates of tax fixed for several types of goods to be consumed and services to be rendered. Hence, few items under the GST regime will become cheaper and few may even become expensive.
Let’s discuss the benefits of GST in the different sectors of the country.
To the Common Man/Citizens
As a consumer, the common man is the person who gets affected by even the slightest of change in the taxes of the country. GST has transformed the whole indirect tax regime of India. Let’s see how the implementation of GST will affect a citizen of the country.
- GST is a simplified transparent tax and has abolished a number of indirect taxes which was levied by the Centre and State Governments, including Central Excise duty, Service Tax, VAT, Purchase Tax, Central Sales Tax, Entry Tax, Local Body Taxes, Luxury Tax, etc.
- It focuses on removing the Cascading Effect, i.e. tax on tax.
- It has led to falling prices of many consumer goods as manufacturing cost of many good has reduced due to less burden of taxes.
- Items like a car, FMCG etc. are expected to become cheaper than before.
- As a simple rule of economics, with fall in prices of the items, there will be an increase in the demand or consumption of goods.
- This increase in demand will tend to increase the supply. Hence, will ultimately lead to the rise in production of goods.
- In the long run, it will be helpful for the common man, as increased production of goods will create more job opportunities.
- This will help in lowering the burden on the common man i.e. you will have to shed less money to buy the same products which were earlier costly.
Benefits of GST in the Long-Run
GST will also boost up government’s revenue by widening the tax base and improving the taxpayer compliance. GST is likely to improve India’s ranking in the Ease of Doing Business Index and is estimated to increase the GDP by 1.5% to 2%.
GST is largely technology driven. The interface of the taxpayer with the tax authorities will be through the common portal (GSTN). There will be simplified and automated procedures for various processes such as registration, returns, refunds, tax payments, etc. All processes, be it for registration, the filing of returns, payment of taxes, the filing of refund claims etc., would be done online through GSTN.
The input tax credit will be verified online. Electronic matching of input tax credit across India will make the process more transparent and accountable. This will encourage a culture of compliance. This will also greatly reduce the human interface between the taxpayer and the tax administration, leading to speedy decisions. With less human intervention, it will also lead to a reduction in corruption.
Though GST would help India to have a single national market, a better tax structure, easier administration, and enforcement, etc. but there will be certain obstacles as well. The other added advantages with the implementation of GST outweigh the cons and hence, GST will be in our Nation’s best interest.
Please contact us on this toll free number to know more 18001025807 or email@example.com.