What Is The Positive Impact Of GST On The Indian Economy?
When assessing the influence of GST on the Indian economy, it is important to remember that both sides of the coin (pros and disadvantages) must be considered. In this blog, we have discussed the positive impact of GST on the Indian economy, to know more about GST, join GST Training In Chennai at FITA Academy. GST was implemented with the following key goals in mind:
`1)Eliminating the ambiguity regarding the number of indirect taxes taxpayers are expected to pay. This also includes eliminating the tax cascading impact.
2)GST intends to raise the number of taxpayers in the country, aiding the economy’s growth.
3)GST’s objectives also include the development of a corruption-free nation and reducing tax evasion rates.
Positive Impact of GST on the Indian Economy
It is important to note that in India, GST is levied at the point of sale of goods and services; thus, GST is levied on the taxpayer when the products or services are consumed. GST is classified into three types:
The Central Government collects CGST (Central Goods and Services Tax) on intrastate sales of goods and services.
The State Government collects SGST (State Goods and Services Tax) on intrastate sales.
When products and services are supplied from one state to another, the central and state governments collect and split the IGST (Integrated Products and Services Tax). It also includes imports and exports.
The following are the beneficial effects of GST on the Indian economy:
1)Simplified Tax Structure-GST gives India a simple tax structure due to its single tax and easier calculation. After paying for the product, the buyer clearly knows how much tax he has paid.
2)Support for small and medium enterprises – The amount of GST to be paid is determined by the firm’s annual turnover and size. This has been a boon for small and medium-sized businesses.
3)More funds for production-GST successfully lowered total taxed revenue, resulting in greater funding for manufacturing.
4)Enhaned operation throughout India-Because of the single unified tax system, which makes it easier for goods movement across India, there has been an increase in operation throughout India.
5)Increased volume of export-Customs duty reductions on commodities have permitted an increase in export volume. Following the implementation of GST, manufacturing units have also been saving money while making items.
Thus some of the benefits of GST on the Indian economy are a simplified tax structure, support for small and medium enterprises, More funds for production, Enhanced operation throughout India and Increased volume of export.