In 2017, the government of India introduced the Goods and Services Tax (GST) scheme to modify and revolutionize the taxation system of India. There are a lot of benefits of GST in India and is expected to uplift the economy of the country and boost its all-over growth. It was a noteworthy reform in the field of indirect taxes.
The impact of GST on Indian economy is quite noticeable, as this scheme essentially merges a large number of Central and State taxes to eliminate double taxation. It has made the overall taxation system easier and has reduced the burden on the common man. The GST scheme necessarily unifies the taxation system all across the country and thereby establishes a uniform mode of taxation that is equal for all the citizens of the country.
What are the main components of the GST scheme?
The GST scheme consists of mainly three chief components which are highlighted as under:
Central Goods and Services Tax (CGST)
CGST is the tax charged by the Central Government on Intra-State supplies of goods and services. It is governed by the CGST Act. The rate of CGST collected, and the revenue shared on certain goods and services is decided by the Centre and the State together.
State Goods and Services Tax (SGST)
SGST the tax levied on Intra-State supplies of goods and services by the State Government. The taxes collected by the State are governed by the SGST Act.
Integrated Goods and Services Tax (IGST)
IGST is the tax levied on the Inter-State supply of goods and services. It applies in cases of import of goods to India and also the export of goods from India. It is governed by the IGST Act.
How does the GST scheme benefit the Indian economy?
The goods and services tax is a strategic undertaking that is expected to provide the much-needed growth in the Indian Economy. The benefits of GST in India are many, some of them are listed below.
Independence from the Cascading Effect of Taxation:
Before the implementation of the GST scheme, the citizens had to pay multiple taxes for the same products or services at the local level, State level, and the National level. This led to the cascading effect of taxes, which overburdened the taxpayers of the country.
Moreover, the taxation system was considered to be inconsistent as the rate of taxes on different goods or services varied greatly from one State to another and this led to the degradation of the country’s economic system. The multiple taxations of a single product burned a hole in consumers’ pockets, thereby, discouraging consumption and preventing manufacturers from producing to their optimum capacity.
After the implementation of the GST scheme, the system of repeated taxation of goods and services was eliminated. The taxpayers were freed from the burden of cascading taxes and complicated taxation systems. The buying capacity of the citizens was boosted by the introduction of the GST scheme. This significantly uplifted the economy of the country, this is one of the many examples of the impact of GST on Indian economy.
Increased transparency in the taxation system:
Under the GST scheme, taxpayers know exactly how much and on what basis they are being charged. This significantly increased the transparency in the system and has reduced corruption. Corruption is one of the most crippling problems in the economic growth of the country. The reduction of corruption in any way directly boosts the country’s economy to a great extent.
- There are numerous benefits of GST in India, for example, the GST scheme has now removed custom duties imposed on exports. This will increase the country’s competitiveness in the international front because of the lower costs of transactions.
- The GST scheme has successfully increased the government’s revenues by extending the tax base.
- The GST scheme provides credits to producers for the taxes paid in the goods and services chain. This encourages producers to buy raw materials from registered dealers. The scheme is expected to bring in more vendors and suppliers under the purview of taxation.
- Numerous tax barriers such as check posts and toll plazas led to the wastage of unpreserved items being transported. This has been made easy by the implementation of the GST scheme.
What is Khatabook?
Khatabook is an online application that allows users to manage their businesses, maintain personal ledgers, and even pay taxes. Khatabook is one of the best online portals for paying taxes due to the following reasons:
- The taxpayers can pay their taxes at any time and from anywhere easily through this portal, even through their mobile phones. They no longer need to follow the tedious and cumbersome duty of standing in long lines and paying taxes.
- On payment of taxes through this application, the funds are transferred immediately. This prevents any delay in tax payment after the payment is initiated by the taxpayer.
- The payment of taxes through this online portal helps in accessing, tracking, and maintaining of the records by the Income Tax Department. This, in turn, reduces the possibilities of any hassles related to the late payment or non-payment of taxes that may pop up in the future. In this way, a more transparent model of payment of taxes is established by Khatabook.
- The taxpayers can easily check the status of their tax payment online by this application. This helps the taxpayers know if the taxes they paid have been deposited correctly or if there were any setbacks during the transaction. The application essentially provides an easy tracking system for online payment of taxes.
- Khatabook keeps a backup of all the information regarding the transactions made for the payment of taxes. This ensures that the users do not lose critical transactional information in case of any damage to the device. Moreover, the application is compatible with eleven different languages and is easy-to-use. The application also reminds users of pending payments by SMS.
The country’s taxation system has significantly improved since the implementation of the GST scheme. The impact of GST on Indian economy can be observed by the boost of the economy. It has reduced the burden of cascading taxes on the common man of the country and has improved their buying capacity.
This scheme boosted the country’s economy immensely and has made India a hotspot in the import and export businesses and with no doubt, the GST has had a positive impact on the Indian economy. Payment of taxes has become easier due to the utilization of online applications like Khatabook. Unlike earlier, the taxation system of India benefits the country and its tax-paying population instead of burdening them.
The GST is considered one of the most important revolutions in the taxation system of India and its economy, mainly due to the positive impact of GST on the Indian Economy and the benefits GST has to offer India.