Key Benefits of GST
GST Stands for Goods and services tax .Many of economists name this tax as a greatest tax reform .Uniformity ,simplicity and transparency are the key benefits of the GST.
GST is an indirect tax for the entire nation that will make the country one unified common market. Nine benefits of goods and services tax are as follows .
Benefits Of GST
1. Life would get simpler
The first and the biggest benefit of gst is life would get simpler .The Goods and Service Taxes would replace around seventeen different taxes.
GST would lead the compliance cost to fall. Multiple taxes like octroi, central sales tax, state sales tax, entry tax, license fees, and turnover tax will no longer be present.
Many other indirect taxes would merge in a single tax.
2. No hidden taxes
Second Benefit of Goods and service tax (GST) will not be a price for registered retailers. Hence there will be no hidden taxes.
This very fact will drastically lower the cost of doing business. It will help export become more competitive.
Read : Definition of business .
3. Demerit to tax evaders
This system might be of demerit to Tax Evaders. Evasion and theft of Tax will be minimized as it is easy to track Tax Evaders with the Goods And services tax.
4. Encourage to pay taxes
Income tax credit might also encourage suppliers to pay taxes.
5. Diversify source of revenue
GST would diversify the sources of revenue for the Government other than just income tax and petroleum tax.
6. Equal distribution of tax burden
With the Goods and Services Tax, the tax burden would be equally divided among the Manufacturing and service sectors.
It would be done through lower tax rates at the same time by increasing the tax base and reducing tax exemptions.
7. Drop in the cost of capital goods
Many of capital goods do not receive input tax credit. Under GST capital goods would receive the full tax credit which would result in twelve to fourteen percent drop in the cost of capital assets.
It would lead to six percent rise in investment in capital goods.
8. Lower logistic cost
Logistics and inventory cost would lower down. Manufactured goods would be cheaper because of lower logistics and tax cost.
9. Removal of state restrictions
State restrictions that are levied on some states have reduced online e-commerce, and as a result, some online sites do not ship to certain states. Under the GST these restrictions would end.