Here’s why GST is expected to be a game changer

GST is the largest tax reform in India

GN Bureau | June 30, 2017


#GST   #Goods and Services Tax   #RBI   #Reserve Bank of India   #tax laws  


The Goods and Services Tax (GST) is expected to be a game changer.
 
According to the RBI, GST is the largest tax reform in India, paving the way for a single national market by merging several central and state taxes
 
Listed below are some of the benefits of GST:
 
Easy compliance: a robust and comprehensive information technology (IT) platform and seamless transfer of input tax credit from one stage to another in the value chain would incentivise tax compliance.
 
Uniformity of rates and structure: GST will ensure that tax rates and structure are common across the country, thereby increasing certainty and ease of doing business.
 
Removal of cascading: seamless tax credits throughout the value-chain and across states would ensure minimal cascading of taxes, thus reducing hidden costs of doing business.
 
Reducing compliance cost: The uniformity in tax rates and procedures across the country will economise on compliance cost.
 
Gain to manufacturers and exporters: the subsuming of major taxes in GST and reduction in transaction costs would lower the cost of locally manufactured goods and services and increase India’s export competitiveness.
 
Improve tax administration: with a robust user-friendly IT system in the form of the Goods and Services Tax Network (GSTN) portal, GST would be simpler and easier to administer.
 
Higher revenue: GST is expected to reduce the cost of collection of tax revenues and improve revenue buoyancy.
 
Single and transparent tax: there would be only one tax from the manufacturer to the consumer leading to greater tax transparency.
 
Relief from tax burden: efficiency gains and prevention of leakages will benefit consumers with a reduction in the overall tax burden estimated to be around 25-30 percent.
 

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