In the year 2017, the Goods and Services Tax (GST), is a comprehensive consumption tax on goods and services sold domestically for consumption. Based on the destination principle, the GST scheme was one of the biggest economic tax reforms that took place in India. Earlier, there were numerous taxes levied on almost every single product purchased or used by the consumers. This led to the cascading effect or tax-on-tax effect as the Central and the State collected numerous taxes. This essentially increased the burden on the taxpayers. The GST scheme reduced complications in tax administration and has paved the way for a corruption-free tax administration.
- 1 What are the Different Components of GST?
- 2 What are the Benefits of the GST Scheme?
- 3 Advantages of Paying Taxes Online.
- 4 Why choose KhataBook?
What are the Different Components of GST?
Goods and Services Tax scheme is an umbrella term that encompasses the following constituents:
Central Goods and Services Tax (CGST) is the tax collected by the Central Government on intra-state sales and transactions. The CGST applies to all transactions taking place within the state.
State Goods and Services Tax (SGST) is collected by the State government. The different taxes levied by the state, such as luxury tax, entertainment tax, state cess, and surcharges are subsumed by the implementation of SGST. The state government collects taxes from the citizens through SGST.
This is the tax collected by the central government for all inter-state transactions, that is, sales and operations taking place between two or more states.
What are the Benefits of the GST Scheme?
Before the implementation of the GST scheme in 2017, the taxpayers had to pay several taxes at the local level, state level, and national level. This cascading tax effect burdened the tax-paying population of the country. For example, the price of the same product varied greatly from one state to another. This was unfair for the consumers as they had to pay different prices for the same commodities simply because of the elaborate and distinct taxing schemes of their respective State Governments. This led to the degradation of the economy over numerous years.
Since the implementation of the GST scheme, the taxation system of the country has become unified and free of unnecessary complications. The GST scheme is regulated by the Goods and Services Tax Council, which is headed by the Union Minister. The taxpayers no longer have to pay multiple taxes at different stages like production, transportation, and final selling. Earlier, a single product was taxed multiple times, and this burned a hole in the taxpayers’ pockets. Buyers were starting to lose their buying capacity. This led to a crippling deterioration of the overall economic system of the country.
The implementation of the GST scheme has successfully eliminated repeated taxation on the same product. It has also enhanced the exemption limit for small service groups and also introduced the Composite scheme wherein certain businesses are required to pay only a certain fixed percentage of their turnover as taxes to the government. Such companies profited immensely from the GST scheme.
Advantages of Paying Taxes Online.
With the advancement of technology, taxpayers can easily pay their taxes online. There are numerous advantages to paying your taxes online.
Taxes can be Paid Any Time that’s Convenient to the Taxpayer.
One of the most important benefits of registering on the online portal of GST is that the taxpayers can pay their taxes anytime and from anywhere. The hectic and time-consuming process of physically going and depositing taxes is thereby eliminated, and people can easily pay their taxes even from their smartphones.
Instant Transfer of Funds.
Often, the transfer of funds while paying taxes is delayed. This often leads to late payment of taxes. However, registering on the GST portal helps in the instant payment of taxes by ensuring the immediate transfer of funds once the taxpayer initiates the payment.
Maintenance of Records at the Income Tax Department.
Paying taxes via the online GST portal helps in maintaining important records at the Income Tax Department. This greatly reduces the chances of any hassle related to late payment of taxes.
Easy Inspection of Transfer Status Online.
The taxpayers can quickly check the status of their tax payments online. The payment of taxes via the GST portal helps taxpayers to check if their payment was successful with the help of the instant tracking facility.
The GST portal provides a unique 15 digit identification number to every new taxpayer upon registration. The GST No. or GSTIN (Goods and Services Tax Identification Number) has replaced the previous TIN, which was generated to the taxpayers. GSTIN is now compulsory to be included in every transaction made by an individual or a company, and strict rules are applied for weeding out fraudulent transactions from the system.
Why choose KhataBook?
KhataBook is a smartphone application that allows users to manage their businesses and personal ledgers easily. KhataBook can also be used as an online tax-paying platform.
KhataBook happens to be one of the best online platforms for paying taxes because of the following reasons:
- All your credit accounts are easily managed.
- The application allows users to review all the transactions, including tax payments made by the users.
- The application generates a report so that the users can easily understand their finances and their payments and receipts.
- The application is compatible with 11 different languages.
- The application automatically backs up all the information so that the users don’t lose critical information in case they lose their phones or any other kind of damage to the device.
- The application reminds users of pending payments through SMS.
The GST scheme implemented by the government has significantly improved the taxation system of the country. A unified taxation system has prevented the cascading effect of taxes and has significantly reduced the burden on the common tax-paying population of the country. It has also made it easier for the Income Tax Department to keep track of tax payments. Payment of taxes via the online portal of GST has made the entire process much simpler and faster.