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mains Test Series 2018
Q. GST and benefits: Discuss the benefits of Goods and Service Tax.
Nov 29, 2016 Related to : GS Paper-3

Ans :

Introduction-

Goods and Services Tax is a comprehensive indirect tax on manufacture, sale and consumption of goods and services throughout India. It will create single market in the country by replacing taxes levied by the central and state governments. The necessary amendment has been made to the Indian Constitution and GST will come to effect from 1st April 2017.

Benefits of GST-

Input Tax Credit is unique feature of GST and it requires an unbroken chain of GST. Most businesses in India are Unorganized Sector who doesn’t pay taxes. Purchasing from them won’t have Tax Credit since suppliers as well as buyers won't allow an understatement because then, they would lose their tax credit, they tend to trade with organized sector. So unorganized sector come in purview of GST and more taxes would be collected

With coming up of GST, businesses can concentrate on just one tax - uniform structure, same rates, rare exceptions, one agency, single compliance. The impact is not only a simplified business but also a less expensive business administration. 

avings on the tax leads to lower production costs, which in turn leads to lower retail price of Goods and Services. Such situation creates surplus disposable income for more savings and consumption. This will leads to overall growth of the economy. 

Conclusion-

GST is considered as one of the biggest reforms in Indian economy. GST has several benefits and it will change the face of Indian economy. It will reduce the tax rates and will increase the tax revenue by broadening the tax base. 

 


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