A big shot for the Indian economy, GST bill passed! Basically, GST is a common indirect tax system, resemblance to the name (goods and service tax), to levy same tax rate for both goods and services. Hence, it removes the old indirect tax system completely in India paying for goods or service wise tax. It covers the entire indirect tax and proposes to the single tax rate only to lesser the burden of the end-consumers. Moreover, the burden of state tax and central has also been abolished simultaneously. It not only eliminates the confusing and complex tax rates of the old indirect tax system but also makes the life simpler and burden free.
Long-term as well as short-term effects of levying single rate will be curiously watched beyond expectation. Some major advantage of being a single tax rate country will be seen not only for businessmen or companies but also for individuals. Following featured benefits of goods and service tax:
- Single tax levy:
A single good and service tax system is a combination of all seventeen existed indirect tax which includes the same idea for excise duty, service tax, sales tax or any other similar terms. Also, it removes the categorization of the different transaction under the same system. The main theme behind the GST is to levy the tax at the destination point only which removes a long and hectic process of the taxes.
- Easy documentation:
The GST is a financial boon for all industry players as well as individuals. This single system will eliminate the need for bulk documents maintained by organization as this system leads an easy single calculation for every kind of goods and services. The complexity of accounts will be lesser now with easy recomputing and auditing.
ultiple tax burdens of the industry. It will also reduce logistic charges which will help in generating more competitive manufacturing industry. This cost effective solution is root for all up-coming pluses for the individual as well as the Indian economy.
- Improved savings:
Lesser cost, smaller expenses, and better savings! The increase in GDP growth rate and control in inflation rate simultaneously will go well to decide the increasing viability of Indian monetary system.
- Rapid investment growth:
After successful implementation of GST, the market will be more competitive for other countries. Ultimately, the power rupee will be better and strong to bring in investment. Moreover, better savings will lead to solid and big investment to gain a good return.
- Faster development:
This tax reform in the mode of GST will directly and indirectly and by both means simultaneously will add a plus in economy which will provide wings to the faster development of the market and nation. It will also give the opportunity to backward states to make them better wealthy and facilitated.
- Better employments:
The GST’s indirect effect will come in the form of better job opportunities, and improved employments because the lesser cost of the product will increase the products’ demand in domestic as well as international market, and product demand will need better human resources and work force.
- More exports:
Lesser product cost will bring in higher foreign currency in the Indian market to invest. All this process will be increased trough the exports as well. Gradually, in the long-term, the balance of difference between imports and exports will be nullified.
- Easy business transaction:
This single tax will make the business as well as the business transaction easier. Lesser documentation, simplified taxation, and returns relieve the both parties from the long and hectic process.
- Tougher tax evasion:
The GST will make the taxation transparent that will avoid the monetary defalcation through tax evasion. Now, it would not be easy to get double benefit in the single transaction through the tax credit.
The biggest tax reform of the country has taken place in the form of GST. The expectations of good and positive results are quite high. Though goods and service tax is a centralized and consumption based end destination tax, but there are some items which are exclusively not covered by the GST. These items are alcohol, tobacco, and petroleum products. Irrespective of this fact, there is one more major point that the basic customs duty will be as before even after GST. No doubt, it is a game-changing shot for India. The GST is a hole and soul step to remove all composite and complex indirect tax system. Looking for a forwarded economy after GST!