Need for GST in India

1) . Present system allows for multiplicity of taxes, the introduction of GST is likely to
rationalizeit.
2) Many areas of Services which are untaxed. After the introduction of GST they will also get
covered.
3) GST will help to avoid distortions caused by present complex tax structure and will help in
development of a Common national market
4) Existing taxes i.e. Excise, VAT, CST, Entry Tax have the cascading effects of taxes. GST
will replace existing taxes.
5) GST will lead to credit availability on interstate purchases and reduction in compliance
requirements.
6) Introducing GST will do more than simply redistribute the tax burden from one sector or
Group in the economy to another.
7)Achieves, uniformity of taxes across the territory, regardless of place of manufacture or
distribution.
8)Provides, greater certainty and transparency oftaxes.
9)Ensure tax compliance across thecountry
10)GST will avoid double taxation to some extent.
11)The implementation of GST would ensure that India provides a tax regime that is almost
similar to the rest of world.
12)GST will provide unbiased tax structure that is neutral to business processes and
geographical locations.

Objectives of GST
1. One Country-One tax-system
2. Consumption based tax instead of manufacturing
3. Uniform registration, payment and input tax credits
4. Eliminate cascading effect of indirect taxes on single transactions
5. Subsume all Central and State Government's indirect taxes
6. Reduce tax evasion and corruption
7. Increase productivity
8. Increase tax to GDP Ratio and revenue surplus
9. Increase tax regulations compliance
10. Reducing economic distortions.

Advantages of GST
1. Eliminating tax on tax effect
2. Easy identification of product because of its Harmonized system of Nomenclature
(HSN)
3. On etax-GST impose only one tax in respect of a product and replacing all hidden
hidden taxes by a single tax
4. Decrease in price of the product.
5. Easy compliance.
6. Reducing transaction costs and unnecessary wastages
7. Eliminates the multiplicity of taxations
8. One-point single tax
9. Reduces average tax burdens on the consumers
10. Reduces the corruption
11. Uniformity of tax rates.

Benefit of GST to Various Stakeholders

a) Benefits of GST to citizens :
o Simpler tax system
o Reduction in prices of goods and services due to elimination of cascading
 o Uniform prices throughout the country
o Transparency in taxation system
o Increase in employment opportunities

b) Benefits to Trade and Industry

o Reduction in multiplicity of taxes
o Mitigation of cascading/double taxation
o More efficient neutralization of taxes especially for exports
o Development of common national market
o Simpler tax regime-fewer rates and exemptions
c) Benefits to Government
o A united common national market boosts Foreign Investment and “Make in
India”campaign
o Boost to export/manufacturing activity, generation of more employment-leading to
reduced poverty and increased GDP growth
o Improving the over al investment climate in the county which will benefi the
development of states
o Uniform SGST and IGST rates to reduce the incentive for tax evasion
o Reduction in compliance costs as no requirement of multiple record keeping
o Simpler tax system
o Broadening of taxbase
o Improved revenue collections
o Efficient use of resources
Limitations or Negative aspects of Present GST system in India
1. Dual Tax System
2. Being GST-compliant
3. Short term business challenges
4. Increased operational cost
5. Online taxation system
6. Multiple registrations
7. Indigenous manufacturing
8. Revenue distribution
9. Effect on discount and reward program
Complexities for the business man