Benefits of Goods and Services Tax GST | What are the advantages of good and service tax GST

 Benefits of Goods and Services Tax GST

Most of the commerce and business administration students, even from the best management colleges often get confused when faced with the intricacies of India's taxation system. 

A very important commercial taxation system introduced by the current government is Goods and Services Tax (GST) and it is very important for anyone associated with managing a business to be completely familiar with it.

Goods and Services Tax (GST) were discussed over a long time in Parliament as a solution for removing the prevailing taxation system of imposing various indirect taxes. Its objective was to implement a system under which most of these taxes could be covered under one umbrella.

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Before understanding the features and objectives of the GST Act, it would be better to take a fast look at the previous taxation system.

Before GST, taxes were charged on every stage of sales viz. excise on manufacture, VAT/CST on sales, entry tax on entry of products in the local area, etc. These taxes get accumulated into the price because the input credit for the tax already paid isn't available to the consumers. 

This cascading effect of tax i.e. tax on tax led to hiking the costs of products or services. These taxes were imposed by the Centre and the states and were generally individually different for each state.

Now the new concept of GST says that GST would be a single taxation system to be levied on the 'supply of products and services and it would be imposed by the GST Council constituting both the central and state government representative. 

Benefits of Goods and Services Tax GST

Another very basic advantage of GST is that it'll reduce the likelihood of tax manipulation by the authorities as there's only one tax to be paid in contrast to multiple taxes in the earlier system.

This method or system is far more transparent. It may gradually eradicate inflation and various provisions like compensation cess will benefit the state also. Consumers who are deemed to be the king will benefit the most under the GST regime.

GST and many other important taxes and laws related to commerce can be studied under the commerce field or B.Com/BBA courses. All the best universities in Delhi-NCR and other regions have started offering specialized courses in the taxation system.

What are the key characteristics of GST?

There are different schools of thought on GST. According to some, it is nothing but the old taxation law implemented with a new name and a few new provisions. GST has once again been divided between CGST and SGST. This might cause disputes between the state and the Centre. 

Taxation mechanisms are an absolute necessity for business managers to understand and the best management colleges in Uttar Pradesh and the rest of the country are now offering special courses to become familiar with them.

1. GST has been a win-win situation for the whole country. It has been beneficial to all the stakeholders of industry, government, and therefore ultimately the consumer. It has helped in lowering the value of products and services, providing a boost to the economy thus making the products and services globally competitive. 

GST aims to transform India into a standard market with the common tax rates and procedures and take away the trade barriers, thus paving the way for an integrated economy at the national level.

By subsuming most of the Central and State taxes into one tax and by allowing a set-off of prior-stage taxes for the transactions across the whole value chain, it might mitigate the ill effects of cascading, improve competitiveness and improve the liquidity of the companies.

GST may be a destination-based tax. It follows a multi-stage collection mechanism. In this, tax is collected at every stage and the credit of tax paid at the previous stage is given out as a group off at subsequent stage of the transaction. This shifts the tax incidence amongst the buyers and benefits the industry through better cash flows and better capital management.

What are the key characteristics of GST?

2. GST is essentially technology-driven and therefore has reduced the human interface to a great extent hence boosting speedy decisions. But this also calls for the requirement of professionals who understand GST. Different courses are being offered by top universities in Delhi NCR to fulfill this rising demand.

3. GST has provided major support to the ‘Make in India’ initiative of the Govt. of India by making goods and services produced in India; that are competitive within the National and International market as well. 

Also, all imported goods are being charged integrated tax (IGST) which is like Central GST + State GST and will thus bring equality for local products with taxation on.

4. Under the GST regime, exports are going to be zero-rated entirely. It is quite unlike the previous system where refund of some taxes would not happen; thanks to the fragmented nature of indirect taxes between the Centre and therefore the States. 

This may boost Indian exports within the international market and help in improving the balance of payments position. Exporters with a clean diary are going to be rewarded by getting a refund within seven days, the 90% of their claims arising on account of exports.

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5. GST has brought buoyancy to the Govt. revenue by widening the assets and improving the taxpayers’ compliance. GST has improved India’s ranking and is estimated to extend the GDP growth by 1.5 to 2%.

6. GST has brought more transparency to tax laws. Since the entire supply chain is taxed at every stage with credit of taxes paid at the previous stage being available at the subsequent stage of supply, the economics and tax value of supplies are easily distinguishable. 

This has helped the industry to access credit and thus enabling the government to verify the correctness of taxes paid and to understand the precise amount of taxes paid.

What are the advantages of good and service tax GST

7. The taxpayers are not required to take care of records and maintain compliance with myriad tax laws of the Central Government and the State Governments such as Central Excise, Service Tax, VAT, Central nuisance tax, Octroi, Entry Tax, Luxury Tax, Entertainment Tax, etc. 

They only need to maintain records and show compliance in respect of Central Goods and Services Tax Act and State (or Union Territory) Goods and Services Tax Act for all intra-State supplies (which are almost identical laws) and with Integrated Goods and Services Tax for all inter-State supplies (which also has most of its basic features derived from the CGST and therefore the SGST Act).

Moreover, many commodities are now charged tax as there were some products on which there were no taxes earlier,  or their rate is going to be increased to either 12% or 18% or 28% if they were earlier charged lower say for instance at 10%,16% or 26% tax respectively.

What are the advantages of good and service tax GST

GST can appear to be a very lengthy and cumbersome procedure which consumes both time and manpower. It covers 29 states 2 Union Territories and the Centre too. To gain a good knowledge of commercial aspects of running a business including taxation; one can pursue a degree in B.Com (Hons).

This course gives you a stronghold over the financial reporting and monitoring of a business. IIMT University Meerut has ties ups with NPTEL, MOOCS & SWAYAM for various value added courses. These are short term courses that give detailed knowledge about a particular subject or topic in specific.

IIMTU offers holistic growth to its students thus taking its name in the top private universities in U.P. for management courses.

BBA is another attractive alternative for those who wish to pursue a further specialized course on business management. BBA helps the students to gain confidence in basic principles of business management and its financial monitoring as well. 

IIMT University Meerut has the best management college of U.P. that offers B.Com (H), BBA and various other programs in this field. IIMT University has state of the art infrastructure and modest facilities to develop and train the students for the competitive business world.                                         

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