Surprising almost every taxpayer of the nation, the government bombarded the people’s businesses with the GST load. And all of a sudden, there was no central tax, excise duty or VAT but only GST. All the earlier indirect taxes were replaced by the Goods and Services Tax. However, GST streamlined the entire taxation in India. And being destination-based in nature, GST also assures the proper documentation of each sale and purchase in a business. But you will be surprised to know the fact that the first revenue collection after the implementation of GST was lower than that of the last collection during the earlier regime. Wondering why?
Well, the entire focus of the government was on to ravage the all the impostors who have been pecking the Indian economy for so long. Now the first lower tax collection under GST might make sense to you. The regime was undoubtedly complex due to some obvious reasons.
- GST has multiple tax base.
- The returns under GST has to be filed thrice in a month.
- The regime is completely digital.
But even after all these repercussions, the regime carried out well. The government had to make the people trust in GST. So, better late than never, the government started listening to the compliance-related issues and making the regime simpler. Let’s take look on the impact of GST in India:
India is a hub of manufacturing units. Millions of small and big-scale industries are involved in the manufacturing processes. After the implementation of GST, the manufacturing sector gained a boost in its growth. The high administrative and infrastructure costs are reduced to a minimum. On the other hand, you also get the benefit of the lower rates on the manufactured goods due to the input tax credit.
The advancement in the technology has not only enriched the contemporary services in India but also gave rise to the new ones. Do you remember your grandmother chewing upon about her fanciful experience working in one of the leading BPOs? You definitely not. Because services like telecommunication, IT, insurance, and financial advanced recently. And FYI, now these services hold accountability of paying more than 50% of the overall tax revenue. Post GST implementation, these services have been able to stretch the business to the foreign nations as well due to the unified taxation approach.
Yet more to come
The massive impact of GST in India has made the government move one step closer to its ultimate objective. The evasion could only be put to an end when the taxpayers will honestly comply with the regime. In addition to the compliance, it is also important for the businesses to equally pass on the benefits of the Goods and Services Tax to the consumers. And the easier the regime will become, the more people will comply with it. And as a result of the compliance at its full swing, the evasion would be put to an end.