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  • 10 Benefits of Goods and Service Tax (GST)

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    singamsetty kavya
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    The document outlines 10 benefits of implementing the Goods and Service Tax (GST) in India. It states that GST will simplify and harmonize indirect taxes by replacing multiple taxes with a single tax from manufacture to consumption. This will reduce costs for businesses and consumers by preventing cascading of taxes and allowing input tax credits throughout the supply chain. It is also expected to boost competitiveness, tax compliance, revenue collection, and make India a common market by standardizing tax rates and structures across states.

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    The document outlines 10 benefits of implementing the Goods and Service Tax (GST) in India. It states that GST will simplify and harmonize indirect taxes by replacing multiple taxes with a single tax from manufacture to consumption. This will reduce costs for businesses and consumers by preventing cascading of taxes and allowing input tax credits throughout the supply chain. It is also expected to boost competitiveness, tax compliance, revenue collection, and make India a common market by standardizing tax rates and structures across states.

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    23 views4 pages

    10 Benefits of Goods and Service Tax (GST)

    Uploaded by

    singamsetty kavya
    The document outlines 10 benefits of implementing the Goods and Service Tax (GST) in India. It states that GST will simplify and harmonize indirect taxes by replacing multiple taxes with a single tax from manufacture to consumption. This will reduce costs for businesses and consumers by preventing cascading of taxes and allowing input tax credits throughout the supply chain. It is also expected to boost competitiveness, tax compliance, revenue collection, and make India a common market by standardizing tax rates and structures across states.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 4

    11/11/2016 10BenefitsofGoodsandServiceTax(GST)ClearIAS

    10BenefitsofGoodsandServiceTax(GST)
    clearias.com/10benefitsgoodsandservicetaxgst/

    ClearIASTeam 11/4/2016

    GoodsandServiceTax(GST)isasingletaxonthesupplyofgoodsandservices,rightfromthemanufacturerto
    theconsumer.GSTisoneindirecttaxforthewholenation,whichwillmakeIndiaoneunifiedcommonmarket.

    ThebenefitsofGoodsandServiceTax(GST)
    GSTisbeneficialnotonlyforthebusinessandindustry,butalsoforthegovernmentandconsumers.Here,we
    bringthetenbenefitsofGoodsandServiceTax(GST).

    1.Easycompliance:
    ArobustandcomprehensiveITsystemwouldbethefoundationoftheGSTregimeinIndia.Therefore,alltax
    payerservicessuchasregistrations,returns,payments,etc.wouldbeavailabletothetaxpayersonline,which
    wouldmakecomplianceeasyandtransparent.

    2.Uniformityoftaxratesandstructures:
    GSTwillensurethatindirecttaxratesandstructuresarecommonacrossthecountry,therebyincreasing
    certaintyandeaseofdoingbusiness.Inotherwords,GSTwouldmakedoingbusinessinthecountrytax
    neutral,irrespectiveofthechoiceofplaceofdoingbusiness.

    3.Removalofcascading:
    Asystemofseamlesstaxcreditsthroughoutthevaluechain,andacrossboundariesofStates,wouldensure
    thatthereisminimalcascadingoftaxes.Thiswouldreducehiddencostsofdoingbusiness.

    4.Improvedcompetitiveness:
    Reductionintransactioncostsofdoingbusinesswouldeventuallyleadtoanimprovedcompetitivenessfor
    thetradeandindustry.WorldBankbelievesthattheimplementationoftheGoodsandServiceTax(GST),
    combinedwithdismantlingofinterstatecheckposts,isthemostcrucialreformthatcouldimprove
    competitivenessofIndiasmanufacturingsector.

    Alsoread:GadgilReportandKasturiranganReportonWesternGhats

    5.Gaintomanufacturersandexporters:
    http://www.clearias.com/10benefitsgoodsandservicetaxgst/ 1/4
    11/11/2016 10BenefitsofGoodsandServiceTax(GST)ClearIAS

    ThesubsumingofmajorCentralandStatetaxesinGST,completeandcomprehensivesetoffofinputgoods
    andservicesandphasingoutofCentralSalesTax(CST)wouldreducethecostoflocallymanufactured
    goodsandservices.ThiswillincreasethecompetitivenessofIndiangoodsandservicesintheinternational
    marketandgiveboosttoIndianexports.Theuniformityintaxratesandproceduresacrossthecountrywillalso
    goalongwayinreducingthecompliancecost.

    6.Simpleandeasytoadminister:
    MultipleindirecttaxesattheCentralandStatelevelsarebeingreplacedbyGST.Backedwitharobustendto
    endITsystem,GSTwouldbesimplerandeasiertoadministerthanallotherindirecttaxesoftheCentreand
    Stateleviedsofar.

    7.Bettercontrolsonleakage:
    GSTwillresultinbettertaxcomplianceduetoarobustITinfrastructure.Duetotheseamlesstransferofinput
    taxcreditfromonestagetoanotherinthechainofvalueaddition,thereisaninbuiltmechanisminthedesignof
    GSTthatwouldincentivizetaxcompliancebytraders.

    8.Higherrevenueefficiency:
    GSTisexpectedtodecreasethecostofcollectionoftaxrevenuesoftheGovernment,andwilltherefore,
    leadtohigherrevenueefficiency.

    http://www.clearias.com/10benefitsgoodsandservicetaxgst/ 2/4
    11/11/2016 10BenefitsofGoodsandServiceTax(GST)ClearIAS

    9.Singleandtransparenttaxproportionatetothevalueofgoodsandservices:
    DuetomultipleindirecttaxesbeingleviedbytheCentreandState,withincompleteornoinputtaxcredits
    availableatprogressivestagesofvalueaddition,thecostofmostgoodsandservicesinthecountrytodayare
    ladenwithmanyhiddentaxes.UnderGST,therewouldbeonlyonetaxfromthemanufacturertothe
    consumer,leadingtotransparencyoftaxespaidtothefinalconsumer.

    Alsoread:StandardParticleModelofQuantumMechanics:InsideanAtom

    10.Reliefintheoveralltaxburden:
    Creditsofinputtaxespaidateachstagewillbeavailableinthesubsequentstageofvalueaddition,whichmakes
    GSTessentiallyataxonlyonvalueadditionateachstage.Becauseofefficiencygainsandpreventionof
    leakages,theoveralltaxburdenonmostcommoditieswillcomedown,whichwillbenefitconsumers.Thefinal
    consumerwillthusbearonlytheGSTchargedbythelastdealerinthesupplychain,withsetoffbenefitsatall
    thepreviousstages.

    Summary

    http://www.clearias.com/10benefitsgoodsandservicetaxgst/ 3/4
    11/11/2016 10BenefitsofGoodsandServiceTax(GST)ClearIAS

    GSThasbeensodesignedthatcreditoftaxespaidateverystageofvalueadditionfromthepointof
    manufacturetothepointofconsumptions,canbeavailedatthenextstage.GSTisessentiallyataxonvalue
    addition,andthereisseamlesstransferofinputtaxcreditacrossthevaluechain.GSTwillsimplifyand
    harmonisetheindirecttaxregimeinthecountry.

    Itisexpectedtoreducecostofproductionandinflationintheeconomy,therbymakingtheIndiantrade
    andindustrymorecompetitive,domesticallyaswellasinternationally.ItisalsoexpectedthatintroductionofGST
    willfosteracommonorseamlessIndianmarketandcontributesignificantlytothegrowthoftheeconomy.
    Further,GSTwillbroadenthetaxbase,andresultinbettertaxcomplianceduetoarobustITinfrastructure.
    Duetotheseamlesstransferofinputtaxcreditfromonestagetoanotherinthechainofvalueaddition,thereis
    aninbuiltmechanisminthedesignofGSTthatwouldincentivizetaxcompliancebytraders.

    Alsoread:EuropeanRefugeeCrisisinaNutshell

    Reference:PIB

    http://www.clearias.com/10benefitsgoodsandservicetaxgst/ 4/4

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