Introduction
The one tax one nation agenda has been faring well since GST was rolled out in 2017. According to stats, pre-GST non-compliance of more than 55% has reduced to less than 20%.
Furthermore, it has also been observed that the formation of the GST network has opened up profitable avenues for businesses, government, economists, and much more leading to an overall boost in the economy. GST has also been pretty successful in eliminating tax evasion, and double taxation and has simplified the tax system.
Despite all its advantages, GST still remains a grey area and many individuals still wonder why they are paying GST and what role does GST play in their everyday purchases. The laws are complex and confusing, so here we are at your rescue! Keep reading to understand the benefits of GST:
Advantages of GST
GST has brought together a number of taxes under one roof thereby reducing the number of compliances. Prior to introduction of GST, there was VAT, Excise and Service Tax and each of these tax laws had their own compliances. Under GST, number of returns to be filed has come down to a greater extent.
For enterprises, the "one tax" structure and the digitization of tax procedures have resulted in a number of fundamental advantages. Efficiencies in logistics increased as a result of GST. Infrastructure for logistics and transportation, like warehouses, is seeing more innovation and investment.
Certain sectors in the country, such as textile and construction, were highly unorganised and unregulated. GST ensured that payments and compliances are done online, and input credit can only be availed when the supplier accepts the amount, thus ensuring that these industries have regulation and accountability.
Manufacturing costs decreased as a result of the GST's reduction in the tax burden on the manufacturing sector. Low prices will boost demand and consumption of commodities either directly or indirectly.
GST has brought an ease of doing business nationally and internationally as the filings have considerably decreased. Previously, practically every company had serious concerns with excise customs, VAT registration, dealing with tax authorities.
GST being an all-inclusive tax ensures stability and equality in the workplace. GST establishes a single national market and eliminates economic misconceptions. As a result, there will be more voluntary compliance and the cost of compliance will be lower.
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