The main aim of the goods and services tax or GST is to simplify the tax structure and unify the Indian market. It is a single indirect tax that will replace numerous other types of indirect taxes and is charged on the supply of all kinds of goods and services. Even though it may sound a bit too complicated, it is a very simple tax system that is added only to the value-added to the goods(or services) and therefore eliminates the cascading effect.
As a business owner, it is surely going to make your life a lot easier. Some of the most prominent GST advantages include:
- Fewer compliances:
In the earlier scenario, you had to satisfy individual compliance requirements of each and every tax applicable to you like service tax or vat. However, now you only have to file one return and fulfil the compliance requirements of GST. The attempt to simplify the process for business owners could be seen even in the way GST numbers are made. If you observe a 15 digit GST number example you can get all of the following information just by observing the format:
- The state
- PAN number
- Number of registrations within a state
- The last two values are a default value and a check code
- Minimum tax payment
If you have a registered GST number the amount you have to pay as taxes is incredibly less. This is especially beneficial for small business owners. Under the previous tax regime, the amount of money a small business owner would have to pay was a bit regressive especially due to the cascading effect. This in turn used to diminish the net profits. However, with GST registration this problem is automatically solved.
- Simple online registration process:
One of the most attractive features of GST is how easy it is to complete the GST registration process. The entire process has been streamlined so as to be user friendly so why not, just register and enjoy the benefits it has to offer.
- Good times for the logistics industry.
Earlier commercial property owners had to create warehouses in different states and cities just to avoid paying current CST or state entry taxes. However, with the advent of GST, the interstate movement of goods has become a lot simpler. With the reduction in these futile taxes under GST, businesses that are involved in goods supply via transportation are already seeing a remarkable increase in their profits.
- Excellent choices for e-commerce and online companies.
Before GST there were no defined guidelines for e-commerce companies. Due to this, these online companies had to register a VAT number separately for each city. With GST all these problems and individual compliance requirements for different states have been eliminated as a single rule applies all over the country.
The GST advantages far outweigh any apprehensions or fears you may have! So why wait?