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GST Benefits & Impacts

GST Benefits

For Business Industry

  • Easy compliance.
  • Uniformity of tax rates and structures.
  • Removal of cascading.
  • Improved competitiveness.
  • Gain to manufacturers and exporters.

For Central & State Government

  • Simple and easy to administer.
  • Better controls on leakage.
  • Higher revenue efficiency.

For Customers

  • Single and transparent tax proportionate to the value of goods and services.
  • Relief in overall tax burden.


GST Impact On Business

Under GST all these taxes (excise, VAT, service tax) will get subsumed into one account. The same trader X has to then maintain the following a/c (apart from accounts like purchase, sales, stock:
  • Input CGST a/c.
  • Output CGST a/c.
  • Input SGST a/c.
  • Output SGST a/c.
  • Input IGST a/c.
  • Output IGST a/c.
  • Electronic Cash Ledger (to be maintained on Government GST portal to pay GST).
GST will mean seamless input credits for intrastate and interstate purchases of goods. This will mean reduction in cost of raw materials as input GST can be set off against the output GST payable on sales. Also GST paid on many services like legal consultation, audit fees, engineering consultation etc. can be set off against output GST. Currently input credit of service tax paid cannot be adjusted against output excise/VAT.

All this will effectively bring down the expenses.

***Impact on sales may vary depending on the industry and the GST rates.

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