Amidst economic crisis across the globe, India has posed a beacon of hope with ambitious growth targets, supported by a bunch of strategic undertakings such as the Make in India and Digital India campaigns. The Goods and Services Tax (GST) is another such undertaking that is expected to provide the much needed stimulant for economic growth in India by transforming the existing base of indirect taxation towards the free flow of goods and services. GST is also expected to eliminate the cascading effect of taxes. India is projected to play an important role in the world economy in the years to come. The expectation of GST being introduced is high not only within the country, but also within neighboring countries and developed economies of the world.
Advantages Of GST
- GST is a transparent and also reduce number of indirect taxes.
- Benefit to people as price will come down which in turn will help companies as consumption will increase.
- GST will also help to build a transparent and corruption free tax administration.
- GST tax is levied on when finished product moves out from the factory. Which is paid by the manufacture and it is levied at the retail outlet when it sold.
- In GST System , when all taxes are integrated, it would make possible then taxation burden to be split equitably between manufacturing and services.
- Simplified and Transparent tax system to all
- Double taxation will be End. No Tax over the Tax Now
- Get Input credit on all Purchases and services
- Simplified Tax System.
How will GST impact the Indian Economy?
- Reduces tax burden on producers and fosters growth through more production. The current taxation structure, pumped with myriad tax clauses, prevents manufacturers from producing to their optimum capacity and retards growth. GST will take care of this problem by providing tax credit to the manufacturers.
- Different tax barriers, such as check posts and toll plazas, lead to wastage of unpreserved items being transported. This penalty transforms into major costs due to higher needs of buffer stock and warehousing costs. A single taxation system will eliminate this roadblock.
- There will be more transparency in the system as the customers will know exactly how much taxes they are being charged and on what base.
- GST will add to the government revenues by extending the tax base.
- GST will provide credit for the taxes paid by producers in the goods or services chain. This is expected to encourage producers to buy raw material from different registered dealers and is hoped to bring in more vendors and suppliers under the purview of taxation.
- GST will remove the custom duties applicable on exports. The nation’s competitiveness in foreign markets will increase on account of lower costs of transaction.