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

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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

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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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