The Goods and Services Tax (GST) came into effect on 1st July 2017 amidst a mix of mass criticism and praise. Its primary objective was to amalgamate several existing taxes like VAT, service tax, cess, and others into one.
Thus, it led to the conception of CGST (Central GST), SGST (State GST), and IGST (Integrated GST).Some argued that these new taxes were nothing but the older ones in disguise.
The GST Council has held numerous meetings over these years to make this taxation more beneficial to the public. However, there remains several advantages and disadvantages of GST that affected not only businesses but also consumers alike, a few of which are as follows -
The Benefits
At the 32nd GST Council Meeting which was held on the 1 of January this year, the tax exemption limit on businesses has been raised from Rs. 40 lakh and Rs. 20 lakh in the case of states with special categories such as Himachal Pradesh and the North Eastern states. Earlier these limits were fixed at Rs. 20 lakh and Rs. 10 lakh respectively.
Businesses with annual turnover of up to Rs. 1.5 crore can opt for the GST Composition Scheme. This is a voluntary scheme under which businesses can pay a flat Goods and service tax rate in India.
Implementation of GST led to the abolition of the commercial tax which was paid at the state borders during the movement of goods. As a consequence, as many as 22 states have eliminated checkpoints just a few days after Goods and service tax was adopted.
The Bane
Earlier businesses had the option of filing taxes quarterly or annually but that now needs to be done every month. This means additional costs in hiring tax consultants and CAs.
There were many commodities which were exempted from taxes but now which have come under the ambit of GST. These include motorized wheelchairs, hearing aids, braille paper, braille writers, etc.
Now you know what is GST and all about this like pros and cons og goods and services tax. It will help you if you are a business person in India.