impact of gst on business

What is Impact of GST on Business?

No Cascading Tax – Under GST, there will be “NO TAX ON TAX”.  Currently, taxes levied by centre are not allowed to be set off against state taxes like excise duty cannot be set off against VAT liability. But under GST input credit of every eligible inward supply is allowed to every person at each stage. The removal of cascading tax is one of the biggest impact of GST on business.

No Double Taxation – Currently, in some cases there are levied more than one tax simultaneously on a single goods or services. For example, On a restaurant bill VAT and Service Tax both are levied on bill amount, which results in double taxation. Under GST, not such double taxation is going to occur.

Reducing Multiplicity of Tax – Under current tax regime, multiple taxes are being levied on different economic activities. For Example, Central Excise Duty is levied on manufacturing, Service Tax is levied on rendering of services, VAT or CST is being levied on sale of goods. There are various restrictions on cross utilization of these taxes. This will lead to simplification of tax system and is significant benefit of GST on business.

Uniform Tax Procedures – Our Prime Minister often says “ONE NATION ONE TAX”. This principle is the backbone of GST model law. Under GST, there will be same set of rules and taxes for all assesses throughout the country.  The GST law applicable to the state of Punjab will be applicable to state of Tamil Nadu. A business unit needs not to worry about law of other states. One more benefit of GST on business is that, there will be uniform tax procedures throughout the country.

Low Compliance Cost – Since with elimination of various types of indirect taxes, the assessee will be required to comply with only one law i.e. GST. As a result, there will be lot of cost savings in compliance in terms of time, money and resources resulting in a benefit of GST on business.

Wider Customer Base – GST is going to open on ocean of opportunities for business. At present, there are a number of trades which work intra-state (within) state only because of different tax rates among different states. Taxes paid on interstate purchase of goods becomes you cost like CST. As a result, some businesses have their restricted customer base within in their state only. But under GST, the whole country is a unified market and businesses can look forward to wider their customer base by exploring new areas.

International Competitiveness – GST is expected to harmonize and simplify the existing indirect tax structure. This will lead to low cost of production resulting in making the Indian goods and services more competitive in international market. This benefit of GST will lead to increased international competitiveness of Indian industries.

If you need more information and details about GST , you can freely contact with “Taxvibe“. Taxvibe is best GST Consultants in Chandigarh. As a GST Consultant, our main  mission is to provide best , current and compherensive information to you. For more details and query

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Impact of GST on Business

 

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