What are the advantages of GST?

20 Aug 2018  Read 762 Views

The Goods and Services Tax abbreviated as GST is a major tax reform which has consolidated the various manners in which the indirect tax was levied by Central and State tax departments and brought it under one umbrella. For instance, it has replaced the Service tax law, VAT, Entry tax, Luxury tax, Purchase tax, etc. It is a comprehensive tax on manufacture, sale and consumption of goods and services.

Advantages of GST

  • Simpler tax system.
  • Reduction in prices of goods and services due to absence of cascading effect/double taxation.
  • Uniform prices throughout the country.
  • Transparency in the taxation system.
  • Reduction in multiplicity of taxes.

What is GST registration?

The GST came into effect on 1st July, 2017 and made it compulsory for all the business entities engaging in supply of goods and services to register for GST, specifically for all those business entities whose aggregate turnover is 20 lakh INR (or 10 lakh INR for the north-eastern states). GST online registration is also mandatory for NRI taxable individuals, entities engaging in e-commerce, entities supplying goods and services via e-commerce operators, individuals who are eligible for TDS (Tax deducted at source), entities engaging in the provision of online information or retrieval services or database access, etc. Separate registration has to be done for each state, if a trader has branches in multiple states. Businesses with more than 1 vertical can register separately for each of them.

Advantages of GST Registration.

  • Legally recognized as supplier of goods and services.
  • Proper accounting of taxes paid on input goods or services which can be utilized for payment of GST due on supply of goods or services or both by the business.
  • Legally authorized to collect tax from his purchasers and pass on the credit of the taxes paid on the goods or services supplied to purchasers or recipients.
  • A person without GST registration can neither collect GST from his customers nor can claim any input tax credit of GST paid by him.

Penalties for non-compliance

Offenders who do not pay tax or fail to make the full payment will face a penalty of 10% of the tax amount. The minimum amount of fine will be Rs.10, 000 if the 10% amounts to anything less. In case of deliberate tax evasions, offenders will be charged a penalty of 100% of the tax amount. The penalty will be 10% of the tax due in case of genuine errors.

To know more about GST, Click here.

About the Author: Chandni Agrawal | 72 Post(s)

Chandni holds a degree in business administration and possess flair for content. She also holds a certificate in investment banking and has a working experience of around 1.6 years in the industry. She is a smart professional who facilitates seamless coordination during hectic work schedule. 

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