Details and Benefits of GST in India

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The previous structure of various indirect taxes in India was very complex to understand for most of the people. There were many kinds of taxes applied by Central and State Governments on various kinds of goods and services. People were paying the taxes and duties like Entertainment Tax, Luxury Tax, Central Sales Tax (CST), Value Added Tax (VAT), Excise duties, Import Duties and many more taxes on goods and services. The main purpose of GST system is to replace all these different types of indirect taxes and to work as single tax system. Goods and Service tax system is applicable all over India from 1st July 2017 as one tax for one country.

GST is an indirect tax system that people need to pay on the purchase of goods and services. Any person providing any kinds of goods and services will be liable to charge GST from the consumer. Indian Government is going to choose the Dual System GST. This new tax system will have components of:

  • Central Goods and Services Tax (CGST)
  • State Goods and Services Tax (SGST)

The previous taxes such as Excise duties, service tax, and custom duty taxes will be replaced by CGST. The other state government taxes such as sales tax, VAT tax, entertainment tax, and various other state taxes will be merged in SGST. So this dual GST tax system will replace all other state and central government taxes and duties. GST system will be implemented for the consumption of various Goods and services. It can be applied on:

  • Intra state supply and consumption of various goods and services
  • Interstate movement of goods
  • Import of Goods and Services

Various Benefits of GST System:

When it comes to applying the GST system in India, it will be very beneficial for consumer, customer as well as the economy of India. The main benefit of this system is that it will replace all previous taxes and duties on various goods and services and it will make the tax system much simple and effective. It will be effective to make India a unified market where businesses will find the best opportunities to have a good start and growth. It will be very beneficial for the export oriented businesses because this tax is not implemented for goods and services that are exported out from India.

After GST, it will be easier to start any new business and it will reduce the costs of businesses. It is also effective to reduce the price of various goods for customers. The number of taxation departments will be decreased so it will be helpful to control the corruption of India. With this new system of tax, the number of tax-paying people and business will be increased and it will be very beneficial for the economy of the country. It will be helpful to attract more business companies to India because India will be a unified and simplified market for business companies. So with all these benefits and effects, GST will be a very helpful factor for the Indian economy.

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