The introduction of GST or Goods and Services Tax is anticipated to reform the economy and encourage the country’s exports. This comprehensive taxation system has been designed and levied on the manufacture, sales, and consumption of goods and domestic services.
The GST is divided into 4 slabs- 5%, 12%, 18% and 28%. Since it is one of the greatest reforms in the country, it accompanies multiple benefits. These benefits help integrate the economy, making Indian products more competitive in the international market. Read on to learn about GST benefits in detail.
Major benefits of goods and services tax in India
Here is the list of benefits associated with goods and services tax in India that one must not miss out on:
- Higher threshold limit
Before implementing GST, businesses earning an annual turnover exceeding the value of Rs.5 lakh needed mandatory VAT registration. However, the existing taxation system has increased the threshold limit to Rs.40 lakh. Hence, small businesses or start-ups can enjoy the benefits of tax exemption.
- Efficient logistics
The logistics industry ensures heavy business in India. It needs to maintain various stockrooms across states to distance from Central Service State and state section charges between state development. This CST application and other state-specific states often obstructed free movement of goods between states. This has significantly castigated the growth of start-ups as they need to produce necessary documents, and any error can result in seizure of goods.
Thus, implementing a uniform and single taxation system allows an organisation to pay its necessary tax and move goods from one state to another easily. Besides, individuals must learn about the latest impact of GST for better understanding.
- Corruption-free taxation system
The involvement of taxes accompanied fraudulent activities and corruption by companies. However, with the introduction of GST, corruption and fraudulent activities have been reduced to a greater extent, thereby enhancing the transparency between companies and the government.
- Small companies revival with a composition scheme
This particular scheme is a simple and convenient scheme under GST India for taxpayers. Small taxpayers can eliminate tedious GST formalities and pay GST at a certain turnover. Any taxpayer can choose this composition scheme with a yearly turnover of less than Rs.1.5 crore. This scheme has significantly reduced the expenses and issues of various small ventures.
- Flexible online process
Previously GST registration consumed considerable time due to extensive documentation. The process of GST registration has become convenient. The entire process of GST, ranging from registration to GST return fillings, all can be done within a few simple steps. However, individuals need to know how to register for GST online and follow the steps accordingly.
Apart from registration and filing returns, taxpayers can apply for online refunds, respond to notices and address grievances. This process has been effective for individuals who have just started in the industry. Besides, after applying for GST registration, individuals are provided with an ARN, which is application reference number. With this ARN status, individuals can check their GST registration application for future purposes.
Furthermore, with GST registration, individuals can conveniently apply for a considerable business loan at affordable rates and flexible lending terms. Besides, existing borrowers can also enjoy the benefit of pre-approved offers on a range of financing options, such as business loans, personal loans, credit cards, etc.
These offers significantly remove the hassle of extensive documentation and save time. Therefore, to check your pre-approved offer, submit your name and contact details.
Thus, GST has unified the Indian market by removing the arbitrary taxation system. Lesser transit hours, reduced logistics costs, no requirement of export taxes etc., have significantly boosted the manufacturing sector.