Benefits of Goods & Service Tax
The Goods & Service Tax or GST is one of the biggest financial reforms in India since its Independence. All businesses, small or large, will be impacted by this new indirect tax regime. GST is levied on both goods and services and will include and replace the current indirect taxes such as excise, VAT and service tax.
What is GST?
Goods & Service Tax is a single tax on the supply of goods and services, right from the manufacturer to the consumer. Credits of input taxes paid at each stage will be available in the subsequent stage of value addition, which makes GST essentially a tax only on value addition at each stage. The final consumer will thus bear only the GST charged by the last dealer in the supply chain, with set-off benefits at all the previous stages.
We have listed below the benefits of GST for businesses in order to simplify the concept.
A robust and comprehensive IT system would be the foundation of the Goods & Service Tax regime in India. Therefore, all tax payer services such as registrations, returns, payments, etc. would be available to the taxpayers online, which would make compliance easy and transparent.
Uniformity of tax rates and structures
GST will ensure that indirect tax rates and structures are common across the country, thereby increasing certainty and ease of doing business. In other words, GST would make doing business in the country tax neutral, irrespective of the choice of place of doing business.
Removal of cascading
A system of seamless tax-credits throughout the value-chain, and across boundaries of States, would ensure that there is minimal cascading of taxes. This would reduce hidden costs of doing business.
Reduction in transaction costs of doing business would eventually lead to an improved competitiveness for the trade and industry.
Gain to manufacturers and exporters
The subsuming of major Central and State taxes in GST, complete and comprehensive set-off of input goods and services and phasing out of Central Sales Tax (CST) would reduce the cost of locally manufactured goods and services. This will increase the competitiveness of Indian goods and services in the international market and give boost to Indian exports.
Simpler online procedure under GST
The entire GST process – starting from registration to filing returns and payment of GST tax – is online. Startups do not have to run around to tax offices to get various registrations under excise, VAT, service tax.
Regulating the unorganized sector
Certain industries in India like construction and textile are largely unregulated and unorganized. GST has provisions for online compliances and payments, and availing of input credit only when the supplier has accepted the amount, thereby bringing accountability and regulation to these industries.
The country has been under the radar for this and this change has disrupted routines. We at Fabcoders have tried to make this transition as smooth as possible; all businesses have been hustling due to this GST transition. Our billing and inventory software, Swift Retail is completely GST integrated taking into consideration the minutest of details. Swift Retail is in compliance with the Government GST format and handles all your inventory and billing needs effectively. Give us a call for a free demo.