What are the benefits of gst

Goods and Service Tax (GST) is an indirect tax levied on the supply of goods and services. It is a nation-wide tax seeking to unify several indirect taxes and is based on the principle of 'One Nation One Tax'.

GST Act was passed in the parliament on 24thy March, 2017 and it came into effect from 1st July, 2017.

The benefits of GST are as follows:

1. Decrease in the cost of goods- The Cost of goods will decrease since tax on tax is eliminated in GST regime. In pre-GST regime, there were many indirect taxes levied by both centre and state. For example, Centre charged excise duty on goods manufactured and States charged VAT on the the same goods. This lead to a tax on tax also as cascading effect of taxes. GST avoids this cascading effect as the tax is calculated only on the value added at each stage of transfer of ownership.

2. Ease of doing business- GST harmonies tax administration between the centre and the states which will improve the ease of doing business.

3. Reduce tax evasion- Electronic return filling and assessment will reduce tax evasion and compliance cost.

4. Benefits to economy- GST aims to make India a common market with common tax rates and procedures and remove the economic barriers thus paving the path for an integrated economy at the national level.

5. Tax system becomes more transparent, regular and predictable.

 

Regards.