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The Benefits of Good and Service Tax
2
Introduction

• The GST (Products and Services Tax) is a
  single tax that applies to the supply of goods
  and services from the manufacturer to the
  customer. GST is a single indirect tax for the
  entire country, bringing India closer together as
  a single market.
• GST is advantageous to businesses and industry,
  as well as the government and consumers. The ten
  advantages of the Goods and Service Tax are
  presented below (GST).

3
Easy compliance

• The GST regime in India would be built on a
  solid and comprehensive IT system.
• As a result, all tax payer services, such as
  registrations, returns, payments, and so on, will
  be available online, making compliance simple and
  transparent.

4
Uniformity of tax rates and structures

• GST will ensure that indirect tax rates and
  structures are consistent across the country,
  enhancing corporate certainty and efficiency.
• To put it another way, GST would make doing
  business in the country tax-neutral, regardless
  of where you do business.

5
Removal of cascading

• There would be minimal tax cascading if
  there was a system of seamless tax credits across
  the value chain and across state borders. This
  would cut down on the costs of running business
  that aren't visible.

6
Improved competitiveness

• The reduction of transaction costs of doing
  business would eventually increase trade and
  industry's competitiveness.
• The World Bank feels that the adoption of the
  Goods and Service Tax (GST), along with the
  removal of inter-state checkpoints, is the most
  important reform that can boost India's
  manufacturing sector's competitiveness.

7
Gain to manufacturers and exporters

• The inclusion of key Central and State taxes
  in GST, as well as the complete and thorough
  set-off of input goods and services and the
  phase-out of the Central Sales Tax (CST), will
  lower the cost of locally manufactured goods and
  services.
• This will improve Indian exports by increasing
  the competitiveness of Indian goods and services
  in the worldwide market. The consistency of tax
  rates and procedures across the country will also
  help to lower compliance costs.

8
Better controls on leakage

• Due to a robust IT infrastructure, GST will
  result in better tax compliance. There is an
  in-built mechanism in the architecture of GST
  that would incentivise tax compliance by traders
  due to the seamless transfer of input tax credit
  from one stage to another in the chain of value
  addition.

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