How GST benefits you as a business owner and as a customer?
Goods and Service Tax (GST) is the biggest tax revolution in India, which will transform the way of doing business. It’s an indirect tax on the sale, manufacture and purchase of goods and services at a national level in India. The tax will be centralized by the government of India and imposed at each stage of sale/purchase through designated officers.
All the stakeholders, from the businesses and companies to the government and people, benefit from it somehow.
So here is a list of some of the reasons why GST is undoubtedly beneficial for you
1 . Easy compliance
An easy compliance regime is one of the proposed Goods and Services Tax (GST). To ensure compliance, a robust tax system needs to be in place that provides taxpayer information from the authorities at all stages, right from registration, returns and payments. This requires an IT system, which would be integral to GST implementation in India. The IT system would simplify many things like GST certificate download by GST number. This page has more information on how to get your certificate today.
2 . No cascading effect
Cascading effect of taxes is one of the main reasons for an inflation in prices. GST will end this undesirable situation and help bring down the cost of your products.
3 . Uniform tax rates
In the previous tax regime, there were many internal taxes determined by state governments. There were also various taxes like central taxes, excise duty and service tax. To add to this confusion, each state had a value-added tax (VAT), different from other states. GST puts an end to this and brings us closer to the dream of one nation one tax. This would, in turn, increase certainty and ease of doing business. Hence due to GST, irrespective of which part of the country you start your business, you will have similar taxes applied.
4 . Easier to administer
The simplified and unified structure of GST coupled with its usage of a robust IT system makes GST very easy to administer and monitor. The simplicity of GST is apparent from its easy to understand and meaningful GST number format. Click here to learn more about it.
5 . Improved tax compliance
The IT network under GST is very different from what we had under the Central Sales Tax (CST) regime in the States, where ITC pass-through occurred. Under CST, ITC pass-through would occur only at the State level, making the system vulnerable to error and fraud. In contrast, ITC pass-through takes place seamlessly across all states under GST. This brings in an additional layer of transparency and accountability in tax administration.
6 . Improved revenue efficiency
The GST will significantly decrease the cost and effort needed for tax collection. Hence it will undoubtedly improve revenue efficiency. This will be achieved by reducing the number of taxes levied on goods and services and improving compliance. Reducing the number of rules and their associated compliance costs should eventually lead to lower prices for consumers.
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