Know what are the in depth benefits of GST in India

How GST is Helping Businesses?

GST (Good and Services Tax) has remodeled the entire taxation system making it more quick and feasible. Now, businesses can file returns easily using online procedures. It also generates more transparency and accountability, thereby reducing the chances of tax-related corruption. However, the benefits of GST in India also include more revenues for both businesses and the government.

The introduction of GST resulted in the simplification of the complex multiple-layered indirect tax structure implied in the country before GST. It had streamlined the businesses and accounting procedures, making it more beneficial, quick, and easy.

Let us use a sample GST number and explore how the benefits of GST in India are helping businesses and industries.

• Online Portal: GST guarantees quick and hassle-free registration, payment, filing of returns, and smooth GST compliance through a robust GST online portal. The online portal also allows businesses to rectify or refile their returns in case of any errors after-tax filing. 
• Simple and Cheaper Compliance: GST is indeed a blessing for micro, small, medium-sized enterprises (MSMEs) or startups as it offers reduced cost of compliance. The government has raised GST exemption limits for these small and medium scale companies making it more profitable for them.
• Sound Audit System: The GST regime features a robust audit mechanism that allows businesses to self-evaluate and pay their tax liability without any intervention from the Income Tax department. Every registered GST payee has to get their accounts verified and audited by a CA.
• Simplified Indirect Tax System: GST has eliminated the need for several indirect taxes such as Central Excise Duty, Service Tax, Sales Tax, Entry tax, etc. As it has diminished the cascading effect of different indirect taxes, it simplified the ways of doing business. 
• Diminished Chances of Frauds: GST has displaced a complex indirect tax system by a simple and transparent tax system that is technology-centric as well. With decreased chances of frauds or ambiguities, it is beneficial for both businesses and the government.
• Single Unified Market India: GST regime has replaced different taxes applicable for doing business between different states with one tax making it easy and hassle less. Businesses can now effortlessly conduct businesses at any location over India without spending money on multiple taxes or wasting time in the cumbersome taxation processes.
• Smooth Business Process: GST has made business easy for those who offer a complete package of goods and services such as restaurants, computer sales, service, etc. GST has made the distinction between goods and services, making business compliance easier and quicker. It also helps in easy invoicing as only one tax rate is adopted.

 

However, for the GST regime's steady functioning, the government counts on the GSTIN (Goods and Services Tax Identification Number). It is a unique id number assigned to every business and serves as a single platform that manages and sees the transaction records of businesses. Now let us understand the classification of 15-digit GSTIN with a sample GST number.

Let us say the PAN number of some companies isAADCB1165X, and it has stores/offices in three different states like Delhi (07), Gujarat (24), and Kerala (32).

The GST number for this company will be 

State code (2 digits) PAN number (10 digits) entity code (2 digits) Check Code (1 digit)

 

• Delhi 07AADCB1165X1ZV
• Gujarat 24AADCB1165X1Z2
• Kerala 32AADCB1165X1Z2

Above mentioned sample GST number clearly indicates that GSTIN is unique for every business, so it offers a transparent and smooth taxation process.

 

Conclusion

Equipped with the latest technology, online filing of returns, easy inter-state movement of goods and services, transparency, and many more benefits of GST in India, it undoubtedly helps in gaining positive returns, smooth business opportunities. It proves to be a boon for businesses.