5 Reasons Why GST is god for Business
The Goods and Service Tax (GST) came into effect in July 2017. It subsumes 17 different taxes levied by the Central and State/UT Governments.1
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The one nation, one tax system aims to improve India’s competitiveness in global markets. GST will ensure minimal cascading of taxes and thus, an anti-inflationary approach. This also leads to a reduction in the costs of doing business.1 Another benefit of GST is that no taxpayer is required to pay tax on advances received for the supply of goods.2
Uniform tax rates and structures across all States and Union Territories reduce a multiplicity of taxes and compliance costs.1 There are 5 slabs under GST: Nil, 5%, 12%, 18% and 28%.2 Check-posts across the country were abolished, post the introduction of GST, ensuring the free and fast movement of goods.3
The Composition Scheme brings greater simplicity and reduces the cost of compliance for small businesses. Small businesses having a turnover up to $214,530, now pay 1% flat rate and file a single annual return. Small service providers having an annual turnover of up to $71,510, now pay GST at 6% instead of 18%.1
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A key feature of GST is the existence of a robust IT system1 for online registration, payment and filing of taxes for easier compliance.
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