The Goods and Services Tax (GST) has been passed by Rajya Sabha and Lok Sabha. The new tax bill will bring enhanced efficiency and transparency. Moreover, the whole country will have a uniform tax structure, which will benefit not only manufacturers but also consumers. In this series of article, we present to you frequently asked questions about the Goods and Services Tax.
What is GST?
GST is the only one indirect tax for the whole nation, which will make India one unified common market. GST is a single tax on the supply of goods and services, right from the manufacturer to the consumer. According to government sources, the new GST bill will bring transparency.
How does GST work?
In GST, credits of input taxes paid at each stage will be available in the subsequent stage of value addition. This makes GST essentially a tax only on value addition at each stage. The final consumer will have to bear only the GST charged by the last dealer in the supply chain, with set off benefits at all the previous stages.
What are the benefits of GST?
The GST will bring in several benefits for business and industry, Central and State Governments and the consumer. If you are part of business and industry, the GST will offer easy compliance via online. This means all tax payer services such as registrations, returns, and payments would be available to the taxpayers online.
The GST will ensure that indirect tax rates and structures are common across the country. This simplifies the ease of doing business in India. The GST will provide seamless tax credits throughout the value chain, and across the state boundaries. The new tax system will improve competition and provides advantages to manufacturers and exporters.
As far as central and state governments are concerned, the GST will be easy to administer than the current complex tax. They can control leakages and prevent tax evasion. It will also bring higher revenue efficiency by decreasing the total cost of collection of tax revenues of the government.
On the consumer front, the new Goods and Services Tax (GST) enable consumers to pay only one tax based on the total value of goods and services. The new tax system will enhance efficiency and prevents leakages. Moreover, the overall tax burden on several products will decrease, which will ultimately benefit consumers.
We are not going to stop here. We will cover more FAQs in the upcoming days about the new Goods and Services Tax. Stay tuned.