Benefits of GST
“The single biggest tax reform since independence to simplify compliance”
- It brings benefits to all the stakeholders’ viz. industry, government and the citizens. It is expected to lower the cost of goods and services, boost the economy and make our products and services globally competitive.
- GST aims to make India a common national market with uniform tax rates and procedures and removes the economic barriers, thereby paving the way for an integrated economy at the national level.
- By subsuming most of the Central and State indirect taxes into a single tax and by allowing a set-off of prior-stage taxes for the transactions across the entire value chain, GST would mitigate the ill effects of cascading and thereby improve our competitiveness.
- GST will give a major boost to the ‘Make in India’ initiative of the Government by making goods or services produced or provided in India competitive in the national and international markets. Further, all imported goods will be charged with integrated tax (IGST) which will be more or less equivalent to Central GST + State GST. This brings parity in taxation on local and imported products.
(i) Simpler tax system
(ii) Reduction in prices of goods and services due to elimination of cascading
(iii) Uniform prices throughout the country
(iv) Transparency in taxation system
(v) Increase in employment opportunities
(i) Reduction in multiplicity of taxes
(ii) Mitigation of cascading/double taxation
(iii) More efficient neutralization of taxes especially for exports
(iv) Development of common national market
(v) Simpler tax regime-fewer rates and exemptions
For Central/State Governments
(i) A unified common national market to boost Foreign Investment and “Make in
(ii) Boost to export/manufacturing activity, generation of more employment,
leading to reduced poverty and increased GDP growth
(iii) Improving the overall investment climate in the country which will benefit the
development of states
(iv) Uniform SGST and IGST rates to reduce the incentive for tax evasion
(v) Reduction in compliance costs as no requirement of multiple record keeping