GST, and the role of GSPs

June 05,2017
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Ankit Agarwal, Managing Director, Alankit Ltd

Perhaps one of the most important economic reforms in the country, the implementation of GST lays ahead a potential opportunity for India to reshape and restructure its corporate landscape. The Goods and Service tax a.k.a GST, is a comprehensive tax levy on manufacture, sale and consumption of goods and services, an umbrella under which, no distinction will be made between goods and services for levying tax. GST will create a common market, wherein all goods and services, irrespective of their point of origin or transaction, would have a common treatment and a common, capped rate. The main objective behind implementing GST is to eliminate the cascading effects of taxes on production and distribution costs of goods and services.

In an economy developing as rapidly as India, competing and leading on a global level, GST will bring about a paradigm-shift in India’s global perception and operations. While harmonizing the current tax structure and uniformity, simplification and transparency in processes remains the core intent of the bill, the impact reaches far beyond, some of which are:

Simplification of the existing tax structure - There is a maze of indirect taxes that the consumer pays such as sales tax, excise and VAT, which leads to increased complexity. With this 'One Nation One Tax' regime, GST aims to untangle this maze and subsume all in one single tax thereby making our nation a unified common market for all.

Ensuring Easy movement of Goods - GST will drastically transform the way business is done in India by bringing in a lot of efficiency into the system and also ensuring faster movement of Goods across the country. The transaction costs of businesses will get reduced with the seamless movement of goods across states.

Entering into a New Age Digital Economy - Everything is getting tagged into an online system.

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