GST will be a game-changer for the Indian economy. It will have benefits for all stakeholders including the Government, industry and consumers. So let’s check out some of the most prominent benefits of GST in India that may directly affect you:
1. Increase in employment opportunities:
As the overall cost of various goods and services comes down due to the implementation of GST Registration in India, there will be a boost in consumption which will lead to an increase in production rate. This will result in generating more jobs both directly and indirectly by increasing the demand for labour.
2. One country one tax:
GST makes it easy for citizens to pay taxes as they don’t have to pay multiple forms of taxes. It enables consumers to get the benefit of the input tax credit on all purchases and sellers can claim credit for all their sales-related expenses. It also minimizes corruption as there is no scope for corruption in the single-layer system of taxation.
3. Eliminates ambiguity:
The provisions under GST are clear and free from ambiguities. It simplifies indirect taxation for businesses making it easy for them to do business in India. It also reduces disputes between the government and businesses on tax payments as well as compliance issues.
4. Merger of taxes:
In the pre-GST era, there were multiple taxes like service tax, VAT, entertainment tax etc. However, GST has merged all of these under one single umbrella making it easier for the Indian economy to grow at a faster pace. Moreover, this has also helped strengthen the government’s revenue collection system across the country as they can now monitor it more efficiently.
5. Improved GDP growth:
The GDP of India witnessed a fall when demonetization was introduced in 2016 as most small businesses lacked proper financial documentation or digital infrastructure to make transactions which caused them to shut down after demonetization came into effect. However, with GST being introduced, the GDP grew by an unexpected percentage as small businesses could now sell products online and make transactions
6. Reduces corruption:
GST will reduce the corruption level in businesses by bringing transparency to the taxation system and reducing human interfaces between taxpayers and tax collectors. Under the new system, all compliances will be made online through computers without any human interface which will result in better control over corruption levels in-country
7. GST to boost exports:
India’s exports suffered a setback recently due to various external factors and GST implementation is expected to give the required boost to Indian exports. With the lower cost of production and distribution of goods, exports are likely to increase at a faster pace than before.
8. A blessing for the unorganized sector
The GST system is set up to regulate unorganized sectors of the Indian economy. Due to the power, it affords government and tax officials, as well as its potential for transparency, there is potential for better regulation in sectors like construction and textiles which often contain a lot of unorganized businesses and were widely unregulated until now.
Clearly GST comes with lots of advantages and even though some parts of it may confuse you like the GST consent letter or the accurate invoicing, its pros definitely outweigh its cons. Visit this page to learn more.