India stepped into a major economic reform with the implementation of the Goods and Services Tax (GST) on July 1, 2017. Most indirect taxes collected at the federal and state levels were absorbed by this ‘one nation, one tax’ reform, resulting in tax administration homogeneity.
GST has a lot of promise for streamlining business and accounting procedures while also maximizing tax benefits for taxpayers. The only exception is that enterprises must follow the GST Council’s procedures in a timely and accurate manner. For more information: Apply for GST Register Online.
While GST registration is a requirement for tax compliance, it also delivers benefits to consumers, manufacturers, and service providers. Small and medium-sized businesses can also apply for composition schemes under the present tax system. Here are some benefits of GST registration:
India’s Ease of Doing Business
Prior to the establishment of GST, any new business had to seek VAT registration from the sales tax department, and compliance was challenging for businesses operating in many states because each state had its own set of rules, costs, and compliance structure. Since the adoption of GST, all new enterprises must obtain a single registration, which is the same across India.
Higher Exemptions for New Businesses
In comparison to previous practices, the GST regime has a higher exemption limit. With a uniform revenue cap of 20 lakh for all businesses in India, the threshold exempts numerous enterprises, which was not possible under the previous tax regime.
Reduced Tax Rates
GST applies to all goods and services, and it is levied only on the value addition, not on the various stages of product development. The procedure decreases the tax burden on taxpayers by reducing the number of levies and their complexity. Furthermore, with the establishment of GST, VAT, CED, and service tax were merged, resulting in a cost reduction for a variety of products.
Taxation that is self-regulatory
GST allows parties to self-regulate by receiving notification from the government portal if there is a discrepancy between the data of invoices filed by you (GSTR1) and the recipient of your product (GSTR-2). Both parties are given enough time to fix the situation, and if they fail to do so, the money is moved back to your output tax liability. Furthermore, such automatically created actions are required to maintain a check on fraudulent operations.
Compliance is simple and requires less effort.
Compliance has been easier and faster for firms in India due to the uniformity of tax rates across the country and centralized registration. Many indirect taxes have been consolidated, thus tax compliance with multiple tax authorities is no longer necessary.
For consumers, one benefit that GST registration provides is the removal of the cascading effect. According to the present GST regulation, a trader can claim a tax credit for taxes paid on goods used to make his goods and services, implying that customers will only have to pay taxes on the end goods. As a result, the price of the product is reduced for the consumer.
Before deciding to implement GST in the economy, the government conducted extensive research. It was done for the sake of the economy, as imposing a single, uniform indirect tax across the country would result in a more stable financial condition. GST registration is critical if an individual wish to be recognized as an Indian taxpayer. To make it easier for the taxpayers, the GST Registration Online Application is available. Contact us to learn more: GST Registration Online India
