Advantages Of GST
- Blog|GST & Customs|
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- < 1 minute
- By Taxmann
- Last Updated on 14 July, 2022
The Goods and Services tax is the biggest tax reform of India. Now, we’ll pay single tax on goods and services. Here’ re we discuss some benefits of GST:
Eliminating tax on tax effect
Previously, several taxes were levied on the same product that increased the price of the product. With the passing of GST, it will eliminate the tax on tax effect by providing credit for the taxes paid.
Under the previous regime, classification of products into different categories caused a lot of confusion and was a litigious issue. GST aims to solve this issue by bringing in Harmonized System of Nomenclature or HSN, which is an eight-digit code to identify products according to international standards.
Instead of several different taxes being levied by state and central government, GST proposes to impose only one tax. GST will replace several hidden taxes that were imposed by state governments and it will improve ease of doing business.
Decrease in price of products
GST will be charged at the manufacturing cost and collected at the point of sale, which means that the price will come down that will benefit the consumers. Once the prices come down, the consumption of consumers will increase which will benefit the companies.
All the compliances like registration, returns, payments, etc. under the GST system will have to be done online, which will make compliance under the GST system hassle-free and transparent.
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