{"id":1255,"date":"2021-06-28T05:34:46","date_gmt":"2021-06-28T05:34:46","guid":{"rendered":"https:\/\/www.kanakkupillai.com\/new-learn?p=1255"},"modified":"2025-05-30T17:56:20","modified_gmt":"2025-05-30T12:26:20","slug":"the-hits-services-tax-gst","status":"publish","type":"post","link":"https:\/\/www.kanakkupillai.com\/learn\/the-hits-services-tax-gst\/","title":{"rendered":"The Hits & Misses of Goods & Services Tax (GST)"},"content":{"rendered":"

Hailed as one of the most significant tax reforms that the Indian economy could have possibly seen in one generation of a lifetime, the introduction of GST<\/strong><\/a> has received mixed reactions from different portfolios of business.<\/span><\/p>\n

If you have missed the media coverage all through the years 2017 & 2018 \u2013 bisecting & dissecting how GST has impacted the various sectors of the economy, don\u2019t worry- the team at\u00a0Kanakkupillai<\/strong><\/a>\u00a0<\/a>will help you get a comprehensive view of our Big Brother of reforms. Before we get into the hits & misses of GST in India, let\u2019s quickly take note of the various indirect taxes that got subsumed by our Big Brother- VAT, Service Tax, Sales Tax, Central Sales Tax, Central Excise Duty, Entry Tax, Local Body Taxes, etc.<\/p>\n

Advantages of GST<\/h2>\n
    \n
  1. Tax Uniformity<\/strong>\u2013 Whether you are a businessman in Elapy or Baroda, the tax levied on your manufactured product or service will be the same. The goods and services produced have thus become competitive not only at the national level but also in international markets. The Modi government loves it as GST has boosted its \u201cMake in India\u201d campaign.<\/li>\n
  2. Higher Purchasing Trends \u2013<\/strong> Companies are pleased with GST, as lower manufacturing costs have led to a reduction in overall costs for the end customer, thereby boosting overall purchasing trends.<\/li>\n
  3. Rationalization of tax structure<\/strong> \u2013 simplification of compliance procedure- Separate taxes for goods and services, in the older taxation system, required division of transaction values into value of goods and services for taxation, leading to greater complications, administration, and compliance costs.<\/span>\u00a0In the GST system, the integration of taxes has helped split the taxation burden equitably between manufacturing and services.<\/li>\n
  4. Broader tax base, lower tax rates \u2013<\/strong> The average tax burden on industry and trade is expected to lower because of GST, resulting in a reduction of prices and increased consumption, which will eventually increase production and ultimately enhance the development of industries. The promotional strategy must be designed in a manner that GST is applicable to sales promotions in India.<\/li>\n
  5. Eliminating Cascading effects of taxes-<\/strong> Thanks to the seamless flow of tax credit from the supplier or manufacturer to the retailer or user, the cascading effects of taxes have gone out the window.<\/li>\n
  6. Regulation of Unorganised Industries \u2013<\/strong> Certain unorganised and unregulated sectors in the country, such as the textile and construction industries, have been regulated with accountability. GST aims to ensure that payments and compliances are made online, and input credit can only be availed when the supplier accepts the amount, thus ensuring that these industries have regulation and accountability.<\/li>\n<\/ol>\n

    Disadvantages of GST<\/h2>\n
      \n
    1. Increased costs due to software purchase-<\/strong> \u2013 Increased costs of software purchase that assists in GST filing process has led to higher operational costs for many businesses.<\/li>\n
    2. Compliance:<\/strong> Businesses must file returns three times a month for every state in which they operate, resulting in at least 36 filings per year per state.<\/li>\n
    3. SMEs have a higher tax burden-<\/strong> Smaller businesses, especially in the manufacturing sector, have faced difficulties under GST.<\/span> Earlier, only companies with a turnover exceeding Rs 1.5 crore were required to pay excise duty. But now, any business whose turnover exceeds Rs 20 lakh has to pay GST.<\/li>\n
    4. An online taxation system \u2013<\/strong> Unlike earlier, businesses have now been forced to move from a paper-based invoicing system to online return filing and making payments. They have also had to employ tax professionals to ensure GST compliance.<\/li>\n<\/ol>\n

      Change, being the only constant they say, is never easy. The government is trying to smooth the road to GST. It is essential to learn from global economies that have implemented GST before us and overcame the initial challenges to reap the benefits of a unified tax system and simplified input credits.<\/p>\n","protected":false},"excerpt":{"rendered":"

      Hailed as one of the most significant tax reforms that the Indian economy could have possibly seen in one generation of a…<\/p>\n","protected":false},"author":1,"featured_media":8575,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"no","_lmt_disable":"no","footnotes":""},"categories":[4303],"tags":[],"class_list":{"0":"post-1255","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-licenses-government-registrations"},"yoast_head":"\nThe Hits & Misses of Goods & Services Tax (GST)<\/title>\n<meta name=\"description\" content=\"Advantages & Disadvantages of GST in India - You have missed the media coverage all through years that impacted various sectors\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.kanakkupillai.com\/learn\/the-hits-services-tax-gst\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Advantages & Disadvantages of GST in India - 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