Advantages of GST in India
Advantages of GST in India
The implementation of Goods and Service Tax (GST) in India expected to reform the economy and boost exports. GST is regarded as one of the biggest tax reforms. The advantages of GST primarily include simplification of the taxation process. Further, it also includes abolishing multiple taxations and increased tax income for the country. In an ideal scenario, all credits of taxes paid included set-off against the tax payable on the subsequent supply of goods or services. The taxes further include purchase or receipt of inputs, input services and capital goods. Thus, GST becomes a destination-based tax. It shall become liable when the tax levied at a single point during the consumption of goods or service. In this article, let us look at some of the major advantages of GST implementation in India.
Advantages of GST
- After the implementation of GST, the tax based widened its coverage for the supply of goods and services. This shall result in an increased collection of tax for the goods and services involved. Hence, the process shall lead to the betterment of economic status for both Central and State Governments.
- Multiple taxes on goods and services in existence shall get abolished or subsumed into GST. It shall make compliance easy.
- Due to the simplified GST filing process, voluntary compliance by businesses with GST shall increase. Therefore, it leads to widening the tax base.
- GST would create a common market across India and reduce compliance costs.
- The implementation of GST would standardise the procedure for GST registration. Further, it shall also simplify GST return filing and GST payment across India.
- GST would improve manufacturing and distribution efficiency. The process shall be deemed effective by removing the cascading effect of taxation.
- It reduces the cost of production of goods/services. It shall also increase the demand for the production of goods/services.
- GST shall litigations. Therefore the Entrepreneurs can focus more on business.
- The framework of GST provides no space for corruption in the system. Hence, litigation, centralisation as well as reduction of discretionary powers with Government officials, shall cease to exist.
- GST would provide India with a competitive edge in the international market, leading to increased exports.
- Increase in tax base and equality of tax treatment on goods or services shall increase tax revenues for the Government.
- GST would reduce tax administration cost, improve transparency and further increase boost efficiency.
- Reduced inflation and fiscal deficit in the medium term.
- Tax on imported goods shall reduce by 5-10%.
- The process for filing taxes shall reduce complicated procedures. The process shall also decrease complication for registering GST online
- The state of foreign direct investment in India shall increase due to simplified filing process. Hence, establishing SMEs and MSMEs shall improve.
For more information, refer advantages of GST implementation in India.