GST was brought into effect in India from 1st July 2017. The execution of GST has been monumental economic reform in India. This brought about uniformity in the tax system central and state in terms of tax administration through “one nation “and “one tax reform.” The introduction of GST has also brought a GST bill format.
Let us see the GST benefits through this article.
Decrease in avoidance of paying the taxes and tax administration free from corruption
The GST act enforcement has rendered the administration of taxes and devoid of corruption. The denial to pay tax leads to the outflow of the government’s revenue. The taxpayers who comply with GST are at the disadvantage because of the people who evade taxes. For the prevention of tax evasion, some measures are taken by the authorities.
- Synchronization of GST and PAN
- Invoice level reporting and matching
- Credit reconciliation
- E-way bill generation
- Beneficial in tracking the movement of the goods
- Investigational purpose by appointing a GST commissioner
- Risk management and analysis by the directorate general
- Uniformity in the registration procedure
- Uniform formats and reduction in tax filling
- Clear, efficient, and transparency in rules
- Bookkeeping convenience
- Better revenue generation with minimized revenue leaks
- Tax refund
- Common tax base
- A universal system of good and services classification
Cascading effect removal
The application of GST eliminated the cascading effect of taxes during the pre-GST period. The goods and services suffered tax-on-tax. GST took responsibility by bringing all the indirect tax. The cost of goods and services has been reduced by implementing GST. The most influential aspect of GST is bringing about uniformity in tax administration. This is one of the main GST benefits.
The filling and registration process is amplified with technology. This assures the transparency of the process, with tax collection being legitimate. The GST portal that is built online supports the following activities.
- Registration process
- Filing returns
- Refund application
- Responding to notice
- Grievance of consumers
Downfall in compliances
There was a decrease in the separate filing of compliances with GST. Excise and service tax had their timeframe of filing and compliances. These were either quarterly or monthly based on the framework of holding GST. GST bill format needs filing of single return. There are 11 returns, out of which 4 are basic returns that a taxable person is supposed to file.
Exceeding exemption limit
The GST council accelerated the exemption limit for the sale of goods to Rs 40 lakhs. However, in the North Indian states, the exemption limit is Rs 20 lakhs. The annual turnover for the composition scheme benefit increased from 1 to 1.5 crores which were effective from April 1, 2019. The limit is 75 lakh for North Eastern States, Himachal Pradesh.
This scheme is beneficial to the sector of minimal taxpayers from cumbersome GST formalities. Under this system, the GST can be paid at a fixed turnover rate. The CGST turnover act 2018 came into effect on February 1st, 2019, and This scheme allows the dealer to supply the services up to 10% of the annual turnover of Rs. 5 lakhs, whichever seems high. The small businesses are gaining profits through this alternating exemption limit, as the profits from different business turnover are considered under the same PAN number.
GST execution on imports by magnifying the manufacturing with decreasing unnecessary expenses. This initiative is supported by GST. The convenience of transaction and the smooth flow of the goods through the state border are additional benefits by eliminating commercial check posts. The Indian market has been unified by GST that has substituted the arbitrary taxation system. Decreasing the logistics cost with fewer transit hours, relief from export taxes, and refunds gave a significant benefit to manufacturing.
GST benefits have provided advantages to the business owners removing unnecessary expenses. GST application has been crucial enforcement for businesses.