Enjoy These Significant Benefits of GST

Enjoy These Significant Benefits of GST

1st July 2017, the date when the economy of India had witnessed a new phase with new taxation policy. After a long battle of 17 years, Goods and Services Tax (GST) Act was finally implemented throughout the country with 122nd constitutional amendment bill.

Ever since there has been going debate on the benefits of newly introduced Goods and Services Taxation (GST) regime.

Mahatma Gandhi once said “First They Ignore You, Then They Laugh at You, Then They Fight You, then – You Win.”

The vision seen by former Prime Minister Mr. Vajpayee 17 years back finally fulfils in 2017 with lots of ups and downs.

Let us move ahead and discuss the major benefits of GST in establishing India with one nation one tax system.

1. Uniform Taxation System

One of the foremost advantages of GST is its uniformity in the taxation system. With the implementation of GST, all the other indirect taxes such as central excise duty, service tax, surcharges and cesses, central sales tax and many more, which were levied by the State and Central Governments previously are now subsumed in single unified GST regime.

The uniformity brings simplicity in the eco-system of tax and filing returns. In current time, taxes are charged majorly on the basis of CGST and SGST.

One more benefit of GST as uniform taxation system is that it helps in making the country’s economy, goods and, services globally competitive and lucrative.

2. Elimination of Cascading System

The uniformity brings elimination of cascading of taxes. GST has removed the cascading taxation system, that is the system of imposing the tax on the tax is now no more being followed.

Removal of cascading taxation system has brought smooth and easy accessibility to input tax credit across products and services.

Because of the removal of cascading effect, the costs of Goods and Services are now lowered and made the path easy for marketers to deal in the national market with easy taxation policy.

3. Benefits of GST to SMEs

In the developing economy like India, Small and Medium-size Enterprises plays an important role in boosting GDP of the country. Under the eco-system of GST, all the business with turnover less than INR 20 lacs annually is exempted from paying tax.

GST act has come as a boon for various Small and Medium-size Enterprises. According to a survey, SME contributes 33% of GDP which is quite a significant size.

Here’s are the following ways in which GST benefits SMEs:

  • GST has reduced the cost of logistics by eliminating check posts formalities. It leads to the easier, faster and cheaper movement of goods across different states.
  • Starting of new business and expanding the existing business across different states is now quite simple because of the centralized taxation system.
  • GST has eliminated the distinction between services and goods. Now SME’s can pay tax on final total products and not on individual products or services.

4. Easy to Start Own’s Business

In the developing economy of India, start-up’s – the newly started businesses are playing a vital role in boosting the GDP of the country. India is listed among those countries in the world which has 4,200+ start-ups’ running, the most number in the world.

According to a survey this figure will reach up to 10,000 by 2020.

With the implementation of GST, start-up’s are being benefited in the following ways:

  • By subsuming all the indirect taxes, GST has made the path easy for the novel entrepreneurs to take a risk of starting one’s own business. Subsuming of taxes has lessened the tax burdens and make GST filing easy.
  • Implementation of the e-way bill has catalysed the eco-system of GST. It has improved the quality of logistics. Through the e-way bill, all the start-up’s, indulge in perishable goods and e-commerce sector are now able to deliver their services and goods timely.
  • With the implementation of GST problems like skyrocket transit costs, delayed delivery of goods and so on are now eliminated. By calling off check-post issues, it is easy for start-up’s to make their goods move smoothly.

5. Benefits of GST to Various Industry Verticals

5.1. Automobile Industry

  • GST rate set for the automobile industry is 28% of different categories.
  • Two wheelers vehicle below 350 cc engine is charged at 28% GST while 31% above.
  • For Commercial vehicles, GST is levied on 28% which previously was 30.2%. The effect is negligible yet beneficiary.
  • Earlier the tax was charged at 33.5% in passenger vehicles. After GST its 28% with cess of 1% and 3%.

5.2. FMCG Industry

  • After GST implementation Fast Moving Consumer Goods (FMCG) industry seen the reduction in taxes with a rate that ranges between 18 to 20%. Previously it used to range around 22 to 24%.

6. Other Major Benefits of GST

Increase in the Revenue

With the elimination of all indirect taxes, after implementing GST, the demand for the product is increased, and thus it leads to higher revenue generation.

Easy Online Procedure

The process of GST is fully online. It has made the work of filing GST returns easy. Start-up’s are majorly benefited through online GST process as now they do not have to run unnecessary for registration.

There are also various online GST filing software’s to help you out. Taxner one of the best GST solutions is one such GST software to take away all your tax hassle.

Simple Trading Process

Ever since GST being implemented, the workflow for industries becomes quite simple. Here are the following ways GST is benefiting Trades and Industries:

  • The multiple indirect taxes are no more implemented.
  • The cascading tax effect is eliminated.
  • The creation and development of the national market for goods and services.
  • The simplification of the export taxation system.

0 Comments

Leave a Reply

Your email address will not be published. Required fields are marked *