GST Benefits different sectors in various ways and there are also sectors which have cons due to GST implementation. GST Benefits and how it affects our Indian Economy, is it good for the future and how GST looks in the longer run, GST Benefits of the larger population are all given in the article.
GST vs. GST BenefitsGST or Goods and Services Tax is the value added tax levied upon the goods and services sold for domestic consumption. The tax charged at every stage of production process is refunded to all parties in the production chain except the end customer/consumer. The single GST replaced several taxes and levies which included: central excise duty, services tax, additional customs duty, surcharges, state-level value added tax and Octroi. Upon introduction of GST, at first many found it difficult to new taxing system, but once the benefits were understood GST seems beneficial for many. Get to know the benefits and also the disadvantages associated with GST.
What are the GST Benefits Over the Previous Multiple Taxing System?Before GST came into existence the taxes were charged under different categories both by Central and State Government. VAT, Central Excise Tax, Services Tax, etc are all replaced by Single taxing system i.e. GST. The single taxing system helped easy understanding of GST which in turn made taxing procedure easier and simple. This enhances uniformity in taxation. Also it creates a common market for goods in the country. Integrated goods and services taxes is the sum of both CGST and SGST for both local as well as imported goods.
GST Benefits on SchemeGST along with implementation introduced a number of related schemes and compensations. These schemes are for the benefit of the manufactures, suppliers and more. Compensations comes in benefit of the states that suffer loss due to the GST. To the producing states, it may put forth losses, but government has framed as such to compensate the losses faced by the states 100% for first three years and next year with 75% and the fifth year with 50%. May schemes and compensation cess are beneficial to the people. Input tax credit is also an added advantage for the people. With the introduction of the compensation schemes, small business people are relieved from high tax burden. Business which has turnovers between Rs.20 lakhs and Rs.50 lakhs will have very low rates.
GST Benefits Reduces Tax EvasionWhen there was a multiple layer of taxing a number of tax evasions were made, but with the single taxing system evasions are reduced and makes the taxing effective. After the introduction of GST, many people are paying off the tax regularly. This has increased proper payment of taxes and ultimately reduces many tax evasions.
GST Benefits For StartupsThe centralized and uniform taxing system makes it easier to start a business and to extend it across the nation. The main objective of simplifying the taxing system is achieved by introduction of GST. GST ensures stability of system of taxation. One of the main benefit of GST is that unorganised industries are regulated.
GST Benefits of Easy FilingGST is the single filing system of taxes, thus maintaining the tax return files, claims made through composition, maintenance of records, registration, and the filing process to made without much complication. Introduction of GST has left behind easy and less compliance. With the help of technology, it is easy to file GST returns online. GST payment for all can be done in the same portal provided by the GSTN. The tax filing, payment, verification of input tax credit can also be done online itself. This saves more time and helps in easy reference of details.
What are the GST Benefits to the Common Man?
With the introduction of GST, there are various benefits for the people. Some of them are listed below.
- People who are ultimate consumers are charged low tax rates which may be 5% or less.
- There is a simplified tax structure due to the uniformity of taxation.
- All goods and services move freely in the markets of the country without much restrictions.
- Small traders are benefited to a great extent with the implementation of GST.
What are the GST Benefits to the Economy?
In the greater view, GST implements brings forth many benefits to the economy as well. Some of the benefits are listed below.
- Uniform system of taxation is created.
- There is an increase in manufacture of products.
- Increase in exports of goods and services .
- Increase in investment.
- Increase in job opportunities in the economy.
What is the Latest GST Rates?With the introduction of GST in July 2017, the tax rates on most on the basic commodities also remained high. But on the 25th GST Council Meet it was proposed to reduce the GST rates on selected goods and services. Based on this, GST Rates were revised on January 18, 2018 and the revised GST rates for both Central and State Came into effect on January 25, 2018. The rate were revised on 29 Goods and 53 Services. GST Rates were revised from 28% to 18%, 28% to 12%, 18% to 12%, 18% to 5% and few were charged NIL GST. And for very few products there was raise in GST Rates.
Goods taxed at 0%
Vibhuti, De-oiled rice bran and parts used to manufacture hearing aids
Reduced from 28% to 18%
Old and used motor vehicles [medium and large cars and SUVs] with a condition that No ITC is availed, Public transport Buses that run on Biofuel
Reduced from 28% to 12%
For Old and used motor vehicles [other than medium and large cars and SUVs] with a condition that No ITC is availed
Reduced from 18% to 12%
Sugar boiled Confectionery, Drinking water, packed in 20 litres bottles, Biodiesel, Drip irrigation system including laterals, sprinklers, Mechanical Sprayer, Certain listed Bio-pesticides (12 in nos), Fertilizer grade Phosphoric acid, Bamboo wood building joinery
Reduced from 18% to 5%
LPG supplied to Household Domestic Consumers, Raw materials and Consumables needed for Launch vehicles, Satellites and Payloads (Both CGST and IGST Rates), Tamarind Kernel Powder, Mehendi paste in cones
Reduced from 12% to 5%
Articles of straw, of esparto or of other plaiting materials, Velvet fabric [with a condition that no refund is claimed on ITC]
Reduced from 3% to 0.25%
Diamonds and precious stones
Rate Increased - 0% to 5%
Rice bran (other than de-oiled rice bran)
Rate Increased - 12% to 18%
Cigarette filter rods
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