The Goods and Services Tax (GST) came into effect back in 1st July 2017 although the reform for a new taxation system began in 1958. GST’s rollout got delayed due to multiple changes of power within the central government.
There were various GST advantages and disadvantages when it was finally implemented that divided the general public’s opinion of this new tax regime.
One of the advantages of GST was its amalgamation of all the 17 taxes into one. It also abolished the entry tax. Goods & services Tax also made it simpler for businesses to register themselves online. It also regulated the unorganised sectors of textile and real estate industries.
The GST Network introduced reduced the hassle for tax filing. The Government also increased the tax exemption limit to Rs. 40 Lakh. Another superb benefit was the composition scheme which enabled registered businesses to pay tax at a flat rate.
Most importantly, Goods and services Tax eliminated the cascading effect of tax and also lowered rates on more than 200 items.
With advantages, GST also bought several disadvantages. For example, products like assistive listening devices and implants, motorised wheelchair, etc. now attracted tax. Companies had to now invest in new ERP software.
Also, businesses with an annual turnover of more than Rs. 1.5 Crore now had to file Goods and services Tax monthly. Further, there is no clarification of tax holidays. Now, GST is applicable on products before discount. Goods and services Tax also increased the rate of service tax on products from 15% to 18%.
These were some of the top advantages and disadvantages of GST in India that received both praise and criticism from Indians. However, the complete implications of Goods and services Tax will take some time to show up in the Indian economic market.
Additional read: Top 10 Advantages And Disadvantages Of GST In India