How is GST beneficial for the country? How would it help to improve the country's economy?

Answer 1

Benefits of GST implementation in the country:

1. Removal of bundied indirect taxes such as VAT, CST, service tax, CAD, SAD and excise.
2. Less tax compliance and a simplified tax policy compared to current tax structure.
3. Removal of casacading effect of taxes that is that it will remove the tax on tax.
   reduction of manufcaturing costs due to lower burden of taxes on the facturing sector. Hence prices of consumer goods will be likely to come down.
4. Lower the burden on the common man which means they will have to spend less money to buy the same products that charged more because of the taxes.
5. Increased demand and comsumption of goods.
   increased demand will lead to increase in supply. Hence this will ultimately lead to rise in the production of goods.
6. Control of black money ciculation by the traders and shopkeepers will be put to a mandatory check.
7. Reduction of the proice gap between the organized sector.
8. The warehouse/logistics costs across the operational and non-operational segements will be curtailed. This will improve the operational profitability by the almost 300-400 bps.
9. The 7th Pay commission is also expected to boost demand and fund inflow in the consumer durables sector by the end of the year.

Better economy with GST implementation

1. Reduces tax burden on the producers and fosters growth through more production. The tax structure without GST is a complicated process and many other difficult bumps which makes the growth of manufacturers stagnant or slow. GST will take care of this maytter by providing tac credit to the manufcaturers.
2. Different tax barrier, such as check posts, toll gates etc, leads to the wastage of unpreserved goods being transported. This penalty trnasforms into a major costs due to higher neds of buffer stock and ware housing costs. GST will bring unioformity to the taxation which will eleimate this issue.
3. There will be more trnaperabncy in the system as the customers will know exactly what they are paying for and how much are they paying for.
4. GST will add to the government revenues by extending the tax base.
5. GST will provide credit for the taxes paid by producers in the goods or services chain. This is expected to encourage producers to buy raw material from different registered dealers and is hoped to bring in more vendors and suppliers under the purview of taxation.
6. GST will remove the custom duties appliacble on exports. The nation’s competitiveness in foreign markets will increse on account of lower costs of transcation.
7. The GST implementation will essentially benefit companies, which have not availed tax exemptions in the past.
   Introducing of GST is a right step in field of inderect tax reforms in India. By bringing a large number of central and state taxes into a single tax, GST is expected to significantly ease double taxation and make taxation overall easy for the industries. The most beneficial part will be the reduction of overall tax load on goods and services. GST will also make Indian products competitive in the domestic and international markets. And lastly GST will make the tranport simply easier giving all the import export an extreme easy business. This entire GST implementation has a positive impact and will help in imporvement of the business and Indian economy from all the sides in various ways.