While the new tax regime was launched around two years ago, it continues to have a fair share of critics and proponents. If you too believe that GST is adversely impacting our economy, industries, or consumers,
Here are a few GST advantages you should know about-
1. Eliminate the Cascading Tax EffectGST is applicable at every stage where a product or service receives value addition. It comes with input tax benefit with the help of which manufacturers and service providers can offset the input tax they have already paid while paying the output tax.
So, the traditional ‘tax-on-tax’ regime or the cascading effect of taxation is effectively eliminated by GST. This advantage of GST not only helps manufacturers and service providers to reduce their tax liability but also helps in reducing the overall cost of goods and services.
2. Lesser ComplianceIn the past, indirect taxes such as VAT, service tax and excise each required separate return filing and compliances. For instance, most businesses were required to file their excise returns, service tax returns, and VAT returns separately every month.
If you are looking for what are the advantages of GST, lesser and easier compliance is one of the most important ones. Under the new tax regime, there is only a single, unified GST return to be filed. Moreover, the entire process of registering for GST and filing returns can be easily completed online.
3. Prevents Tax EvasionAs GST is an online tax system, it automatically adds more transparency to the taxation process. Apart from this, manufacturers and service providers are only able to benefit from the input tax credit facility when the input and output invoices match.
Tax evasion has continued to be a major problem for the government. Preventing tax evasion is one of the biggest GST benefits which helps the government revenue find more buoyancy by increasing their tax base.
As you can see, there are several answers to the question “What is the advantage of GST?". Moreover, the GST council is continuously working to improve the GST regime further and make it more beneficial for the masses. It is also expected to boost the Indian economy, making India a more powerful and economically stable nation.
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The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
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