Page 36 - Banking Finance July 2017

ARTICLE

Benefits that may accrue to the stakeholders being com- pliance costs. Multiple records keeping are not neces-
mon Citizens, Trade/Industry and the Government or the sary. No statutory forms or statutory registers are re-
country as a whole on introduction of GST can be highlighted quired to be maintained. Books can also be maintained
on the following points : in electronic form. The taxpayers would only need to
maintain records and show compliance in respect of
Advantages to the Citizens: CGST, SGST/ UGST and IGST.

a) Simpler tax system. GST is a destination based tax. f) GST Audit is required to be conducted by a Chartered
Accountant or Cost Accountant for a firm having turn-
b) It will bring reduction in prices of goods and services in
over Rs. 1Crore.
most cases due to elimination of cascading.
a) It aims at providing uniform rates throughout the coun- Advantages accruing to the Government
try and simpler tax regime-with fewer rates.
and the country as a whole;
c) GST is largely technology-driven. It will reduce the hu-
man interface to a large extent and thus would lead to a) GST will give a major boost to the 'Make in India' initia-
speedy decisions. GST will bring more transparency in tive of the Government of India by making goods and
indirect tax system. services produced in India more competitive in the na-
tional market as well as in the international market. Also
d) It may increase employment opportunity with more
all imported goods will be subject to IGST which is
export and more production as explained below
equivalent to CGST + SGST. This will bring equality in
taxation on local products and imported goods.
Advantages accruing to the Trade/ in-
b) In the GST regime, exports will be zero-rated in entirety
dustry: unlike the present system where refund of taxes some-
a) It will bring reduction in multiplicity of taxes and miti- times does not take place due to different nature of
gation of cascading/double taxation. It follows a multi- indirect taxes between the Centre and the States. This
stage collection mechanism. In this, tax is collected at will boost Indian exports enabling improvement in the
every stage and the credit of tax paid at the previous balance of payments position. Exporters with clean track
stage is available as a set off at the next stage of trans- record will be rewarded by getting immediate refund
action.
b) Since the whole supply chain will be taxed at every
stage with credit of taxes paid at the previous stage
being available for set off at the next stage of supply,
this will help the industry to take credit and the gov-
ernment to verify the correctness of taxes paid and the
consumer to know the exact amount of taxes paid. It
will bring greater transparency and disclosure in system
through returns.
c) GST will shift tax incidence to consumers through sys-
tematic way and thus benefit the industry through bet-
ter cash flows and better working capital management
d) It will help more efficient neutralization of taxes espe-
cially for export.
e) No separate compliance of Indirect Taxes laws. Only GST
laws need to be complied resulting in reduction in com-

36 | 2017 | JULY | BANKING FINANCE

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