GST is a single indirect tax for the whole nation. It is the biggest taxation reform in India. GST will replace the different taxes at central and state level that include central excise duty, additional excise duty, service tax and stat VAT, entertainment tax etc. The implementation of GST will bring single unified market through which there will be single tax on the supply of goods and services. As GST is destination based tax, end consumer will bear only the tax charged by the last dealer in the supply chain.
The basic idea for the implementation of GST is to create single, cooperative and undivided India to make the economy of India more strong and powerful.
The present tax system has some drawbacks that includes no tax credits were available and double tax. GST brings benefit to all the stakeholders that are individuals, government, businesses and industry etc. It will remove the economic barriers, boost the economy and will make our products and services more competitive.
Benefits of GST in India for industry and business:
Ease to perform:
All the services of taxpayers like registration, filing of returns, payments etc. would be done through the services available online which would result in saving the time and the work can be done easily.
Unified rates of taxes:
After the implementation of GST, the rates of goods and services will be common across the country. The rate of taxes throughout the country will be same irrespective of the choice of doing the business.
No cascading affect:
No cascading will help in reducing the hidden cost of performing the business as there would be seamless credit system throughout the supply chain.
Increase in competition
As the transaction cost of performing the business will be reduced so the competition in trade and industry will increase.
Manufacturers and exporters:
The replacement of indirect tax with GST will reduce the cost of locally manufactured goods and services which in result would increase the demand of the Indian goods and services in the international market resulting in the boost of Indian exports.
For central and state government:
Easy to administer: GST would be more simple and easy to administer from all the other indirect taxes at central and state level.
Efficiency of higher revenue: The cost of collection of the tax revenue of the government will reduce leading to the higher revenue efficiency.
Transparent tax: The replacement of goods and services tax with the indirect taxes levied by the central and state government would bring transparency. In today’s world, the cost of many goods and services may hold the hidden taxes and no or incomplete input tax credit will be available but after the implementation of GST there would only one tax from manufacturer to the consumer of goods and services which would lead to the transparency in the tax system which will be paid by the final consumer.
Uniform rate of taxes:
The rates of GST will become common for all the goods and service across the country. Single rate of tax will bring the unified market, all the direct and indirect taxes such as central excise duty, additional excise duty, service tax, value added tax, entertainment tax etc will come under same umbrella after the implementation of goods and services tax.