How Reformative Measures Like Introduction of GST Will Improve Economy

GST or Goods and Services Tax is the biggest tax reform that India has ever seen. The Indian government has introduced GST with the aim of bringing uniformity in the taxation system and to make the entire tax structure simpler and more efficient. GST has replaced a multitude of indirect taxes that were earlier levied by the central and state governments.

Apart from simplifying the tax structure, GST has also brought in a host of other benefits. In this article, we will discuss how reformative measures like the introduction of GST have improved the economy of India.

1. Increased Tax Compliance:

One of the biggest benefits of GST is that it has increased the tax compliance of businesses. Earlier, there were multiple taxes that businesses had to comply with, and this often led to confusion and evasion. With GST, all taxes have been consolidated into one tax, and this has made it easier for businesses to comply with the tax regulations.

The introduction of GST has also made it easier for the government to track the movement of goods across the country. This has made it difficult for businesses to evade taxes, and has led to an increase in tax revenues for the government.

2. Boost to Manufacturing and Export Sectors:

The introduction of GST has given a boost to the manufacturing and export sectors in India. Earlier, businesses had to deal with a complex tax structure that made it difficult to compete with businesses in other countries. With GST, the tax structure has become simpler, and this has made it easier for businesses to compete in the global market.

Manufacturing has also received a boost with the introduction of GST. The tax structure has made it easier for businesses to procure raw materials at a lower cost, and this has led to an increase in the production of goods. With the increase in production, businesses have been able to reduce their costs and offer goods at a more competitive price.

3. Elimination of Cascading Effect:

The introduction of GST has eliminated the cascading effect of taxes. Earlier, businesses had to pay taxes on taxes, which led to a higher cost of production. With GST, businesses can claim input tax credit, which has reduced the cost of production. This has led to a reduction in the prices of goods, and has made it easier for businesses to compete in the market.

4. Simplification of Tax Structure:

The introduction of GST has simplified the tax structure in India. Earlier, businesses had to comply with multiple taxes that were levied by the central and state governments. With GST, all taxes have been consolidated into one tax, and this has made it easier for businesses to comply with the tax regulations.

The simplification of the tax structure has also made it easier for the government to administer taxes. This has led to an increase in tax revenues for the government, and has made it easier for the government to fund its various developmental projects.

5. Promotion of Digital Transactions:

The introduction of GST has also led to a promotion of digital transactions in India. With the introduction of GST, businesses have to file their tax returns online. This has made it easier for the government to track transactions and has led to a reduction in tax evasion.

The promotion of digital transactions has also made it easier for businesses to transact with each other. With the use of digital transactions, businesses can avoid the hassle of dealing with cash, and can transact with each other in a more seamless manner.

Conclusion:

Reformative measures like the introduction of GST have had a positive impact on the Indian economy. GST has brought uniformity in the taxation system, has boosted the manufacturing and export sectors, has eliminated the cascading effect of taxes, has simplified the tax structure, and has promoted digital transactions. All these measures have led to an increase in tax revenues for the government, and have made it easier for businesses to compete in the global market.