If we analyse the roadmap of Goods and Services Tax (GST), it has enormously benefited the Indian Economy. Within a short span of time, the GST created a huge momentum for businesses and reducing the tax burden for the common man. The newly implemented indirect tax regime ultimately helped every sector from manufacture to buyers in bringing transparency, curbing tax evasion and making all businesses strong. However, this biggest indirect tax has successfully completed its two years which was introduced in India on1 July 2017. Subsequently, in this article, we will discuss how goods and services taxes impacted India’s economy so far-
Positive Impact of GST
GST has simplified the taxation structure in India that is for sure. Hence, here are the following benefits of Goods and services tax that has a positive impact on the economy:
It eliminated the cascading tax effect
After the implementation of the Goods and Services tax, all the taxes have been covered under one umbrella. Following which cascading tax effect has been eliminated.
Prior to the execution of GST, the businesses who generate turnovers in excess of Rs.5 lakh were liable to pay VAT. But at present, there is no such liability imposed on organizations.
No compliances under E-commerce operators
In the pre-GST era, supplying goods through e-commerce was not properly structured and defined. Before the GST regime, it had variable laws. For example, Online websites (like Flipkart and Amazon) delivering to Uttar Pradesh had to file a VAT declaration and mention the registration number of the delivery truck. Tax authorities could sometimes seize goods if the documents were not produced.
However, all these compliances have been eliminated under GST. For these issues, GST has clearly mapped out the provisions for the e-commerce sector which is applicable all over India.
Unorganized sector is regulated under GST
Before GST was implemented, some of the industries such as textile and construction were highly unorganized and unregulated. The implementation of GST has seen the positive enclosure of provisions for online payments and compliances.
India Economy Survey 2018 highlights from GST
As per the economic report, after the implementation of the Goods and Service Tax (GST), there has been a 50% increase in the number of indirect taxpayers; Large increase in voluntary registrations; distribution of GST base closely linked to size of economies; strong correlation between export performance and state’s standard of living and India’s formal sector was found to be substantially greater than currently believed.
What is GST Return and who is supposed to file it?
GST return is a document that is filed by the dealers, who are registered under GST Act. A GST Return includes the details mentioned-below: –
- Sales made by the registered dealer
- Purchase made by the registered dealer
- Output GST on sales of goods and services
- Input Tax Credit or ITC on purchase of goods and services
What is Next?
Meanwhile, as GST has already completed its two years successfully now it’s yet to be decided about what is next? In the next phase of GST, the Sovereignty authority is expected to take up unfinished agenda, reforms, simplification of compliance procedures, rationalization of tax rates, among others.