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One year of GST: Modi government lists 5 key benefits of landmark indirect tax reform

‘GST: One nation, One tax’ the supremely historic indirect tax regime will be just one year old with 30 June of this year and it is good to have a survey of what it has done to the nation, particularly when there will be Parliamentary elections in just one year; it is a sort of performance assessment as to the validity of the big tax reform since many of the opponent camps did not welcome it.

 The revenue department however has done the job and has released key benefits under the new much discussed regime. 

Ease of doing business 

According to the Revenue Department, GST has provided benefits to the small-taxpayers. Notably, under the GST, tax payers with an aggregate turnover in a financial year up to Rs.10 lakhs are exempt from tax. (Aggregate turnover shall include the aggregate value of all taxable and non-taxable supplies, exempt supplies and exports of goods and/or services and exclude taxes viz. GST.). Further, the GST has helped to improve the ease of doing business due to common national market.

Decrease in inflation

According to the government, GST has led to a decrease in inflation due to the reduction in cascading effect of taxes and overall reduction in prices. With an intent to curtail the inflation, the Government has taken various measures under the new regime including finalization of rates which are aligned to existing rate structure for most items and introducing an anti-profiteering clause in the GST law.

Decrease in black transactions

Due to the ‘non-intrusive’ and transparent tax system, the GST has led to a reduction in black transactions, according to the Ministry of Finance. Notably, GST is a self-regulating on-line tax system. 

Boost to Make in India

The government’s initiative of Make In India has also received a big boost under GST, as IGST provides protection to the domestic industry. Further, certain taxable supplies are taxed at the rate of 0% rather than at the standard rate of 15%, in case of export related businesses. 

More informed customers

The ministry of finance states that GST has led to more informed consumers due to the simplified tax regime, and the reduction in multiplicity of taxes.

 

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