For many of us, it is a well-known fact that GST was a complete game changer. However various segments of the population still are unaware of different aspects of gst like the tcs under gst or which items are exempt from gst. So today to start your journey of learning about gst as we are going to discuss how gst positively impacts our economy:
- One tax
One tax for the whole country unlike before when there were multiple types of indirect taxes like VAT, service tax etc. It will bring uniformity in tax rates across the country. This will help in the rationalization of tax rates and also simplify compliance procedures. The new tax regime will help in eliminating cascading effects and improve the competitiveness of products as well as make them affordable to the common man.
- Lower compliance burden
GST also reduces the compliance burden on businesses and improves the ease of doing business for them by reducing their paperwork. Businesses can now easily choose from a wide range of goods and services without worrying about different taxes levied on them at different stages of the supply chain.
This is because it helps businesses to get rid of complex indirect tax laws where they had to pay multiple taxes on value-added components while selling their products to customers or even getting inputs from suppliers!
- Control of black money circulation
Black money is illegal money that has been earned by not paying taxes or not declaring income while filing taxes. This money is then used to buy assets like land, gold and real estate. The new taxation system would help curb this problem since tax evasion will be lower as it will be easier for people to declare their incomes and pay taxes on time without any loopholes or devious ways around it. Moreover, if you are late on your tax payment it is extremely easy to just use a gst late fee calculator and make the payment.
- Reduction in prices
The GST will reduce the prices at which goods and services are sold, making them more affordable. This is good for consumers, who will see their disposable income increase as a result of this reduction in prices. Reduction in prices of goods is possible as due to lower tax burden the manufacturing costs will decrease thereby decreasing the price of the products.
The uniformity of tax laws across the states is another advantage of GST. It will ensure that there is no discrimination between the states, which have been taxing different products at different rates, with the result that some areas would have virtually no taxes on certain products while others had very high taxes on them. This also simplifies the process for businesses that sell goods in different states.
- No cascading of taxes
Due to GST’s input tax credit mechanism, there will not be any cascading of taxes. Before the introduction of GST business owners were really frustrated with the tax-on-tax system as it led to increases in prices and a decrease in demand for the products. However, with GST since cascading of taxes is not an issue ease of doing business is considerably increased. Due to the input tax credit system, the whole supply chain has become completely tax neutral.
Boost to the Make in India initiative
GST allows businesses to export goods and services to international lucrative markets at competitive prices. This is because under GST laws exports are zero-rated. Hence all taxes paid on the goods and services that are exported will be completely refunded.