Goods and Services Tax (or the GST) aims at completely restructuring of intricate and colossal taxation policy in India. There are several GST benefits. Goods and Services Tax is a unified, destination-based tax that came into existence on July 1, 2017, to efficiently replace all the existing indirect taxes, including service tax and vat.
Key advantages of GST Implementation are:
• The biggest advantage is that GST could help build a transparent and corruption-free taxation system in India. After the introduction of interim budget, it was seen that there are several benefits of GST from 2020-21 came in existence.
• GST merges multiple indirect taxes into one singular tax, making it a lot easier to process the tax payment for both individual taxpayers and the government.
• Enables simplified movement of goods and services interstates.
• GST is levied only at the point of sale and not on the purchase i.e. levied only by the last dealer thus making the final product cheaper to the final consumer.
• GST and tax regulations have made it easier to start and run new businesses, with significantly lower paperwork. Its Composition mechanism has reduced the overall tax burden from small businesses. Know how Changes in GST could Complicate Tax System but Boost SMEs.
Disadvantages of GST Implementation are:
• Introduction of the GST initially faced a few hurdles like frequent system failures and postponement of due dates to deposit GST, which resulted in confusion.
• A few export companies like the one in the textile industry faced a downtime due to the slowdown of the payment in the Integrated GST (IGST) because of technical glitches, retarding their growth.
• A few Small and Medium-sized industries had to extra operation costs in hiring expert tax consultants for understanding how GST works.