Friday, February 8, 2019

Why is GST needed in India?

Why is GST needed in India?


Introduction of GST is considered to be a significant step in the reform of indirect taxation in India. Amalgamating of various Central and State taxes into a single tax would help mitigate the double taxation, cascading, a multiplicity of taxes, classification issues, taxable event, etc., and leading to a common national market.
VAT rates and regulations differ from state to state. On the other hand, GST brings in uniform tax system across all the states. Here, the taxes would be divided between the Central and State government.

Impact of GST on Indian Economy

GST offers several benefits to our economy. Here are some key advantages:
  • Create unified common national market for India, giving a boost to Foreign investment and “Make in India” campaign
  • Boost export and manufacturing activity and leading to substantive economic growth
  • Help in poverty eradication by generating more employment
  • Uniform SGST and IGST rates to reduce the incentive for tax evasion

 Impact of GST on Consumers

GST is also beneficial for consumers. Here is how it impacts the Indian consumers:
  • Simpler Tax system
  • Reduction in prices of goods & services due to elimination of cascading
  • Uniform prices throughout the country
  • Transparency in taxation system
  • Increase in employment opportunities

Impact of GST on Traders

GST is also has some positive impact on traders. Let’s see how it affects the traders:
  • Reduction in multiplicity of taxes
  • Mitigation of cascading/ double taxation through input tax credit
  • More efficient neutralisation of taxes especially for exports
  • Development of common national market
  • Simpler tax regime
  • Fewer rates and exemptions
  • Distinction between Goods & Services no longer required

No comments:

Post a Comment