.

12

Taxes on lottery, betting

and gambling
andservices
State Cesses and Surcharges (related to supply of goods

Octroi and Entry Tax

Purchase Tax

GST
Benefits of implementing
under:
be summarized as
The benefits of GST can

For business and industry foundation of tho

would be the
IT system
robust and comprehensive registrations, returns.
Easycompliance: A services such as
all tax payer
India. Therefore,
GST regime in online, which would make compliange
available to the taxpayers
etc. would be
payments,
easy and transparent.
India a c o m m o n market with
of unified national market: GST aims to make
Creation
barriers thus paving the way for
c o m m o n tax rates and procedures
and remove the economic
level.
an integrated economy at the national
that indirect tax rates and structures
Uniformity of tax rates and structures: GST will
ensure

are common across the country, thereby increasing certainty and ease of doing business. In
other words, GST would make doing business in the country tax neutral, irrespective of the
choice of place of doing business.

Removal of cascading: A system of seamless tax-credits throughout the value-chain, and

across boundaries of States, would ensure that there is minimal cascading of taxes. This
would reduce hidden costs of doing business.

Improved competitivenes: Reduction in transaction costs of doing business would

eventually lead to an improved competitiveness for the trade and industry.
Gain to manufacturers and exporters: The subsuming of major Central and State taxes i"
GST, complete and comprehensive set-off of input goods and services and phasing out o
Central Sales Tax (CST) would reduce
the cost of locally
This will increase the manufactured goods and services
competitiveness of Indian goods and services in the
market and give boost to
Indian exports. The internationa
the
country will also go a long way in
uniformity in tax rates and
procedures acr
reducing the compliance
cost.
For Central and State
Governments
Simple and easy to administer:
being replaced by GST. Backed Multiple indirect taxes at the Central and State levei are
with a robust
and easier to
administer end-to-end IT system, GST would be mpler
than all other
indirect taxes of the Centre and sin
State levied so
tai
R O D U C T T O WT O
ODS
GOO,

MRO
1.13
on
o n
le
leakage: GST will result in better tax
Better
rols
c o n t r o l s

compliance due to a robust IT

.oDue
Due to
to the
the seamless transter
seamle of
input tax credit from one
infrastructure.
stage to another in
chain
of value addition, there is
.alue addition, an in-built mechanism in the
design of GST that would
the

tax pliance by traders.

incentivize
i n c e n t i v i z e

Higher revenue
nite effic efficiency: GST is expected to decrease the cost of collection of tax revenues
Government, and theretore, lead to
will higher revenue efficiency.
ofthe
F o rt h e c o n s u m e r

cle and transparent tax proportionate to the value of goods and services: Due to
Single ano
nle indirect taxes being levied by the Centre and State, with incomplete or no input tax
multip
i t s available at progressive stages of value addition, the cost of most goods and services
he country today are laden with many hidden taxes. Under GST, there would be only one
tax from the manufacturer to the consumer, leading to transparency of taxes paid to the final

Consumer.

Relief in overall tax burden:Because of efficiency gains and prevention of leakage

overall tax burden on most commodities will come down, which will benefit consumers.

Final price of goods is expected to be lower due to seamless flow of input tax credit between
the manufacturer, retailer and service supplier;

I t is expected that a relatively large segment of small retailers will be either exempted from
tax or will suffer very low tax rates under a compounding scheme- purchases from such
entities will cost less for the consumers;

Average tax burden on companies is likely to come down which is expected to reduce prices
and lower
prices mean more consumption.
Make in India:
i l l help to create a unified common national market for India, giving a boost to foreign

investment and "Make India"

in campaign.
W8ive a major boost to the 'Make in India' initiative of the Government of India by
in the national well as
800ds and services produced in India competitive as

international market.
evEnt cascading of taxes as Input Tax Credit will be available across goods and

Services at every
stage of supply.
Harn nonization of
laws, procedures and rates of tax.
t will boost xport and manufacturing activity, generate more employment and thus
increa GDP with economic growth.
gainful employment leading to substantive
gai
 INTRODUCTION TO TAX (GS
GOODSAND SERVICEs TAX (GST
L.14
by generating
more employment and moOTe
Ultimately it will help in poverty eradication
financial resources.
for exports thereby making our product
More efficient neutralization of taxes especially
boost to Indian Exports.
more in the international market and give
competitive
benefit the
the overall investment climate in the country which will naturally
Improve
development in the states.
Uniform SGST and IGST rates will reduce the incentive for evasion by eliminating rate

that between intra and inter-State sales.

arbitrage between neighboring States and
which is expected to reduce prices
Average tax burden on companies is likely to come down
and lower prices mean more consumption, which in turn means more production thereby
helping in the growth of the industries. This will create India as a "Manufacturing hub".

Ease of Doing Business:

Simpler tax regime with fewer exemptions.

Reductions in the multiplicity of taxes that are at present governing our indirect tax system
leading to simplification and uniformity.
Reduction in compliance costs No multiple record
investment of resources and
keeping for a variety of taxes- so lesser
manpower in maintaining records.
Simplified and automated procedures for various
refunds, tax payments, etc. processes such as
registration, returns,
All interaction to be through the common GSTN
portal- so less public interface
taxpayer and the tax administration. between the
Will improve environment of compliance as all returns to be filed
verified online, online, input credits to be
encouraging more
paper trail of transactions.
Common procedures for
return,
registration oftaxpayers, refund of taxes, uniform formats
common tax base, common of tax
system of classification of goods and
greater certainty to taxation services will lend
system.
Timelines to be
provided for important activities like
Electronic obtaining registration, refunds, etc.
matching input of tax credits all-across India
transparent and accountable. thus making the process mo
Challenges of GST imnlar