Major Advantages of GST for Business
Hemlata Khandelwal / 2021-12-14 06:07:16

GST (Goods and Services Tax) is an indirect tax. The Government of India introduced GST with the aim of unifying several existing indirect taxes in India. The government introduced the GST Bill on 1 July 2017 as a comprehensive tax to be levied on the manufacture, sale, and consumption of goods and services for the entire country.

The introduction and implementation of GST was a significant step in the Indian tax reform, it has changed the way businesses view taxes. The idea behind the introduction of GST was to simplify the tax regime and make it more streamlined. GST aims to widen the network of tax collection and make the process business and development friendly.

There have some Advantages of GST. These are as follows:

  • GST has subsumed several taxes like Service Tax, Central Excise Duty, Luxury Tax, Sales Tax, etc. This has made the tax calculation and collection process much simpler.
  • GST has improved the transparency of the tax collection process.
  • Industry experts believe that the cost of goods and services will come down in the long run due to GST, this is because earlier many Value Added Tax (VAT) led to increasing in the price of goods and services. . Now, a tax will eliminate that problem.
  • Service providers with a turnover of fewer than 40 lakhs need not pay GST but those service providers whose turnover is more than or equal to 40 lakhs need to pay GST and take Online GST Registration. In the northeastern states, the limit is Rs20 lakh. This is a huge advantage for small businesses, as they can avoid the time-consuming taxation process and focus more on their business activities.
  • GST will bring much-needed regulation for the unorganized sectors like the textile industry. In India, the unorganized sector generates huge revenue along with providing large-scale employment, but when it comes to tax, they remain quite erratic. GST tries to correct this discrepancy.
  • Under the current taxation system, there are separate taxes for goods and services. For this, transaction values ??have to be separated from the values ??of goods and services to determine the tax liability. This complication is similar to a headache. GST will prove to be the solution to this problem.
  • Earlier, the government had to undertake the complex task of administering several indirect taxes. But the GST Network (GSTN), the backbone of GST, will handle all the processes related to GST operation. It is a fully integrated platform, which will simplify and ensure the conduct of GST activities.
  • GST will be levied at the last point of consumption, thereby eliminating double taxation from manufacturer to retailer outlet. This is an important step towards eliminating economic problems.
  • GST has boosted India's GDP (Gross Domestic Product). A country's GDP reflects a country's economic efficiency and growth over time. GST has brought diverse industries under a single tax law making it easier for businesses to operate.
  • One of the main benefits of GST is that taxpayers can do online registration, GST return filing, and tax payment all through the online GST portal. In this process, there are systems that compare the invoices of the supplier and the buyer. This system will effectively control tax fraud and tax evasion. Also, it will ensure trade in the national economy in a structured and organized manner.
  • In the earlier VAT regime, e-commerce businesses differed significantly with respect to tax compliance. But GST has removed all the confusions related to it. The entire e-commerce sector, pan-India all will now have to comply with the provisions laid down under the GST law. It has also eliminated complications related to the movement of inter-state goods.
  • But, a tax reform system of this scale cannot be without drawbacks. Therefore, it is important that businesses are aware of this.

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