How is GST beneficial for the country? How would it help to improve the country's economy?

The GST goods and service taxes is a bill that has been recently passed and it makes your tax structure easier and helps in doing away with all the extra taxes from a business.

GST helps manage your taxes easily and can throw in a lot of clarity on what you are paying for and what is the number of taxes that you are paying. It leaves out all the unnecessary taxes you have been paying along without knowing much about it. 

With GST all the taxes are paid and all the complexities are done away with. It is a consumption based tax which depends on the sale, manufacture and also the consumption of good and services at a national level. 

With the rise in Global trade, GST has almost achieved a global standard. It brings out a qualitative change in the tax system and helps redistribute the burden of taxation equitably between both manufacturing and services.

Will GST Bring about an Improvement in the Economy? Let us find out

Some of the direct benefits of GST can be listed as follows,

·         It removes bundled indirect taxes including the VAT, CST, service tax, CAD, SAD, and also the excise.

·         A simplified tax policy, a great change from the the current tax structure.

·          Doing away with the casacading effect of taxes.

·         Slashing down of manufacturing costs as the burden of taxes lowers down considerably on the factoring sector. Hence prices of consumer goods will come down.

·         The common man will be greatly benefited as they will have to pay less money.

·         Both the demand and consumption of goods increases.

·          Increase of demand leads to increase in supply, which will ultimately lead to a rise in the production of goods.

·          The black money circulation also gets controlled, especially circulated by the traders and shopkeepers will be checked thoroughly.

·         A sharp reduction in the price gap between the organized sector.

·         The warehouse/logistics costs will be controlled across both the operational and non-operational segments. The best psart of this is it will improve operational profitability by the almost 300-400 bps.

·          The 7th Pay commission will also boost demand and fund inflow, especially in the consumer durables sector. It is expected to rise during the end of this year.

The indirect tax in the country has improved the model of their supply chain and systems thanks to the multiplicity of taxes and costs involved. The total tax collection in India including both the direct and indirect is Rs. 14.6 lakh crores and from that about 34 percent of that comprises indirect taxes and with Rs. 2.8 lakh crore comes from excise and another Rs. 2.1 lakh crore comes from the service tax. 

Thus, with the implementation of GST, the entire indirect tax system in India is transformed and going in the right direction, at least as far as the economy of the country is concerned. The tax revenue expectedly will change the face of the country’s economy and will help bring at par with the other economically prosperous countries of the world.