The journey of GST started way back in 2000, when the Atal Bihari Vajpayee government first thought of exploring the avenues of GST in the country. 14 years later, the potential GST Bill benefits were brought up for discussion once again, ultimately leading to GST becoming the law of the land by the President’s assent on 8th September, 2016.
While every change has its pros and cons, GST is no different. However, it is expected that one will be able to see significant GST benefits for the common man, as well as for the business community, in the long run
However, as we have embraced GST on 1st July, some of the immediate GST advantages are as follows:
- Elimination of Cascading Effect of Taxes - GST subsumes most of the indirect taxes being levied across the country, thus eliminating the “tax on tax” effect which has been plaguing the supply chain and increasing costs for the end user.
- Seamless flow of Input Tax Credit - The seamless availability of Input Tax Credit will actually encourage suppliers to pay taxes, bringing down the tax evasion level as well as that of tax corruption
- Common Market - GST will effectively dissolve state boundaries, as the same tax rate prevails across the entire country. Also the removal of Central Sales Tax (levied earlier on inter-state sales) and the removal of VAT (different in different states) will mean that the entire country will become a level playing ground for all businesses.
- Better Days for Under Developed States - GST being a consumption based, destination based tax, it will provide a huge boost to consumption heavy states, who can now utilize the revenue jump to focus on industrialization and manufacturing.ill not be required to use HSN codes
- Technology led Law - GST has been designed in such a manner than compliance will now become largely based on technology. The reduction of human intervention will make the process much more transparent, corruption-free and efficient.
Apart from the obvious benefits of GST - elimination of cascading effect, simplified compliance, technological backing and uniform process across India – one of the major GST bill benefits is bound to be the ease of doing business. However, the success of a business will significantly depend on the ability to understand this change and bring about the relevant changes in the business processes to keep growing as well as stay compliant. That will truly ensure ample benefits of GST to consumers as well as businesses, which in turn will take the nation forward.