Goods and Services Tax (GST) is an indirect tax that is levied on the supply of goods and services in place of several indirect taxes. GST Act was passed in Parliament on 29th March 2017 and came into effect on from 1st July 2017. It is one Indirect Tax for the entire Country.
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| Credit: Business Today |
The tax will be levied on goods or services during the point of sale only in GST. In the case of Inter-states sales, Tax can be levied as Central GST and State GST.
BENEFITS OF GST
1) Easier Tax Compliance- Instead of paying many indirect taxes, businessmen needs to pay only one unified indirect tax. Businessmen now don't have to deal with several taxation laws and legal advice that will reduce their expenses and is beneficial for small business.
2) Transparency in the new system as it involves only one tax law that means only one department that will surely contribute to reducing corruption.
3) Reduction in price as the credit of input tax is available against output tax.
4) Simple and Cost saving system that will increase the production and employment structure. Now you have to maintain only CGST, SGST, IGST instead of many VAT as previously was.
5) It will reduce the tax burden on the small businessmen as well as on big company. It will directly increase production and increases exports.
6) The main advantage of GST is that it is levied during the point of sale, unlike VAT that was applicable several points(from manufacturing to retail outlets).
7) Tax Structure is simple and can be understood by any businessman.
8) One LAW for all the Tax in India, it will improve the introduction of Foreign investors as they can easily trust and understand one country one law for the tax system.
9) Reduction in tax will increase the production of goods and that will help in exporting their services to various parts of the country that will increase employment opportunity.
10) In this GST Tax Law both big business and small business comes under the GST, some business which was earlier not a part of the Tax system will be counted under GST and this will increase the revenue share of both State Government and Central Government that will boost the economy of the country and increases GDP.
11) Tax evasion reduced as the GST levied during the point of sale and distributed between manufacturing and services.
12) More money is available to poor states as this is not levied on manufacturing or production which is generally in Rich states but now the revenue will also rise in poor states.
13) Previously the production or manufacturing of the goods was carried in the states where Tax is low but after a unified tax system, this tax bias for location is removed.
Benefits the Central as well as State Government
The government will gain $15 Billion a year due to this Tax system and that will contribute to GDP results in an increase of GDP to 1.5% from 0.9%, Increase exports and that will increases the employment status and increases growth. Less burden of the tax will increase manufacturing.
Foreign investment will also increase as they will trust the revenue model.
Benefits of GST on Startups
1) Simple Taxation
2) Ease of registration
3)Higher Exemption
4) Businesses in both sales and services.
5) Saving in logistics, cost & time.
Related Article: Startup India: All details
Benefits for Common Man
Tax collected on the point of sale and both will be charged on the manufacturing cost resulting in decreases in selling cost after some time.
Price will go down that will increase consumption and definitely increases production that will directly increase the growth of the company as well as the revenue for the nation.
GST COUNCIL MEETING
GST Council on Saturday slashed rates of several products and services.
Some items GST were reduced from
1) 28% to 18%
2) 28% to 5%
3) 18% to 12%
4) 18% to 5%
5) 12% to 5%
6) 12% to nil.
7) 5% to nil.
Some items GST were reduced from
1) 28% to 18%
2) 28% to 5%
3) 18% to 12%
4) 18% to 5%
5) 12% to 5%
6) 12% to nil.
7) 5% to nil.
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