The Goods and Services Tax (GST) has several benefits that help in integrating the economy while making Indian products more competitive internationally. It also makes compliance with tax rates and procedures easier.
The Goods and Services Tax (GST) is imposed on the supply of products and/or services within the country. It subsumes multiple indirect taxes that are imposed by the State Governments or the Central Government, such as Service Tax, Purchase Tax,Central Excise duty, Value Added Tax, Entry Tax, Luxury Tax, Local Body Taxes, etc.
GST offers benefits to the government, the industry, as well as the citizens of India. The price of goods and services is expected to reduce under the new reform, while the economy will receive a healthy boost. It is also expected to make Indian products and services internationally competitive.
These are some of the main benefits offered by GST. In the following sections we shall take a brief look at the advantages of the regime to the common man, the economy, and industry and trade.
Benefits to the Common Man
- A good number of products and/or services are either exempt from tax or charged at 5% or less.
- The poor will receive their due.
- Small traders will find themselves on a level playing field.
- Simplified tax structure with fewer exemptions.
- Products and services will be allowed to move freely across the country.
- Increased competition between manufacturers and businesses will benefit consumers.
- Items such as movie-ticket prices, two-wheelers, televisions, stoves, washing machines, SUVs and luxury cars, two-wheelers, etc. will be cheaper.
Benefits to the Economy
- Creation of a unified common market.
- Increase in manufacturing processes.
- Enhancement of exports and investments.
- Generation of more jobs through enhanced economic activity.
Benefits to Industry and Trade
- Uniform procedures for registration, filing of returns, payment of taxes, and Tax refunds
- Elimination of cascading of taxes thanks to the seamless flow of tax credit from the supplier or manufacturer to the retailer or user.
- Small scale suppliers can make the most of the composition scheme to make their goods less expensive.
- Higher efficiency with regards to the neutralisation of taxes so that exports are globally competitive.