Elimination of Multiple Taxes
One of the benefits of GST is the elimination of multiple indirect taxes. Every tax that currently exists will not be in a picture. It means current taxes like excise, octroi, sales tax, Service tax, CENVAT, turnover tax etc will not be applicable and all that will fall under common tax called GST.
Saving More Money
GST applicability means the elimination of double charging in the system for a common man. Through this, the price of goods and services will reduce & help common man for saving more money.
Ease of business
GST brought the concept of “one country one tax”. It will prevent unhealthy competition among states and will be beneficial to do interstate business.
Cascading Effect reduction
From manufacturing to consumption, GST will be applicable at all stages. It will provide tax credit benefit at every stage in the chain. In the current scenario, at every stage, the margin is added and tax is paid on the whole amount, in GST you will have tax credit benefit and tax will be paid on margin amount only. GST will reduce the cascading effect of tax thereby reducing the cost of the product.
It is expected that demand for a product will increase and to meet the demand, supply has to go up as GST will reduce the cost of the product. Besides, the requirement of more supply will be addressed by only increasing employment.
Increase in GDP
Higher the demand, higher will be the production. Hence, it will increase the gross domestic product. Moreover, It is estimated that GDP will grow by 1-2% due to GST.
Reduction in Tax Evasion
Goods and services tax is a single tax which will include various taxes to make the system efficiency with fewer chances of corruption and Tax Evasion.
More Competitive Product
It will make manufacturing more competitive as GST will address the cascading effect of the tax, inter-state tax, high logistics cost. It will be beneficial to the businessman and consumer.
Increase in Revenue
Under the GST regime, 17 indirect taxes has been replaced with a single tax. Apart from this, the increase in product demand will ultimately increase tax revenue for state and central government.