What are the benefits of GST?


 For Central and State Governments

o Simple and easy to administer: Multiple indirect taxes

at the Central and State levels are being replaced by

GST. Backed with a robust end-to-end IT system, GST

would be simpler and easier to administer than all

other indirect taxes of the Centre and State levied so


o Better controls on leakage: GST will result in better tax

compliance due to a robust IT infrastructure. Due to

the seamless transfer of input tax credit from one stage

to another in the chain of value addition, there is an inbuilt

mechanism in the design of GST that would

incentivize tax compliance by traders.

o Higher revenue efficiency: GST is expected to decrease

the cost of collection of tax revenues of the


Government, and will therefore, lead to higher revenue


For the consumer

o Single and transparent tax proportionate to the value of

goods and services: Due to multiple indirect taxes being

levied by the Centre and State, with incomplete or no

input tax credits available at progressive stages of value

addition, the cost of most goods and services in the

country today are laden with many hidden taxes. Under

GST, there would be only one tax from the manufacturer

to the consumer, leading to transparency of taxes paid to

the final consumer.

o Relief in overall tax burden: Because of efficiency gains

and prevention of leakages, the overall tax burden on

most commodities will come down, which will benefit


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