It has been one year since the launch of the indirect tax regime that ushered in India on 30th June 2017. GST came into existence with the tagline – one nation, one tax to simplify the taxation on goods and services. The GST impact on business could be seen as GST rates on services seem to be serving one and all.
State and Central Governments have administered GST. GST has subsumed numerous central and indirect state taxes such as VAT, excise duty, entry tax and more. One year has gone fast ever since the implementation of the GST in India, let’s see the effect of GST on business and its benefits to the common man in India.
- Easy of doing business
As per the Revenue Department, GST has been able to offer many benefits to small taxpayers. Under the GST regime, taxpayers with a turnover of up to Rs.10 lakh in a financial year are exempt from paying any taxes. What’s more, the latest GST rates have also simplified and eased out doing business due to a common national market.
- Decrease in inflation
As per the sources of the Central Government, GST has also been able to decrease inflation due to the reduction in cascading effect of taxes and reduction in prices. With a motive to lessen the inflation, the Government is committed and has taken many measures under the GST regime. It also includes the finalization of rates aligned to the current rate structure for most items by adding an anti-profiteering clause in the GST law.
- The decrease in black/illegal transaction
The GST brings in a non-intrusive and a transparent tax system, and it has led to a reduction in the black or illegal transaction as per the Ministry of Finance. Needless to say, the GST impact on business and the common man has been good for them. The one-line tax system has worked out to be doing wonders for all.
- Boost to Make In India
The Government’s initiative of Make In India has also been able to get a big boost under the GST regime as the IGST offers protection to the domestic industry. What’s more, certain taxable supplies are even taxed at 0% rather than 15%, in the case of export-based businesses.
- More informed customers
The GST intended to bring about a change in the lackluster taxation system in India. Earlier, the customer or business owner needs to pay taxes at different junctures which led to the increase in the overall prices of goods and services. Not any more, as the GST saves you from paying many taxes. Hence, when a large number of people are aware of the GST, they can save you from paying illegal taxes. As claimed by the Ministry of Finance, the Good and Services and Taxes (GST) has led to a large number of informed consumers. It is because of the simplified and non-complicated tax regime, and the decline in the multiplicity of taxes.
Here’s all you need to know about GST.
- Improved efficiency of logistics
The logistics industry in India had to maintain numerous warehouses across the states to keep off the current CST and state entry taxes on inter-state movement. The warehouses were forced to work below their capacity, leading to increases operational cost. However, things changed for the good under the GST regime, as the discussed restrictions on inter-state movement of goods have gone down. Due to GST, warehouse operators and e-Commerce players are now keen on setting up of warehouses at a strategic location such as Nagpur, instead of every city on the route of delivery.
The Bottom Line
The GST impact on business has led to many benefits as discussed in the post. If you wanted to set up a business, you should by now be feeling motivated to set up a business sans hassles and come under the GST regime.
