In 2017 we came across a term called GST, a new taxation reform which has brought a major change in the economic structure of the country. As of now, the GST (Goods and Services Tax) has become an essential part of every business in India. But if you take a look back in the past, it’s nothing new as its being in the process for a long time. It only came into the daylight when we are all enlightened and envisioned that this is needed for the betterment of the Indian economy.
What is this GST all about?
The GST or the Goods and Services Tax is a unified tax system that is brought into effect to replace the old indirect tax structure in India. The new reign of indirect tax is designed in a much more comprehensive way so that it can be imposed at every stage of the production process. If we compare it with the previous structure, the only difference that it makes is that GST collects tax from the point of consumption and not from the point of origin. So the manufacturer or the trader of the goods get the refund of the taxes at various stages, and the final tax is imposed on the consumer.
Why is GST Verification Essential?
Since the time GST came into effect, businesses, both large and small, have been benefitted in ways more than one, thereby helping them to grow and develop. However, to enjoy the complete benefits of this indirect taxation structure, GST verification is essential. To get an in-depth insight into this subject matter, we will be discussing in the following sections why GST verification is essential and how could it be beneficial for your business.
5 Substantial Justification for your Whys on GST Verification
- Eliminates the Cascading Effect of Tax – In the pre-GST era, there were separate taxes incurred, namely Excise Duty, Service Tax, VAT, Customs Duty and others. GST subsumes all the indirect taxes that existed before it has been implemented, thus bringing a balance in the economic foundation of the nation. If you opt for GST verification, then it will help you in removing the cascading effect of tax on your business. It also termed as ‘tax on tax’ which has been quite ineffective as it doubles the calculation of tax structure, thus creating huge complexities and has been a primary reason for inflationary prices. These affect not only the final consumer but also the entire supply chain. So the best way to save your business from the cascading effect of the tax is by having a GST registration.
- Improved Logistics Efficiency – Before the implementation of GST, the Logistic industry in India has to face the brunt of the inter-state tax movement. These make it hard for the businesses as they have to maintain multiple warehouses across the States. And all this was done to avoid the CST that applied back then. But the new reign of GST has made the present tax structure easy for the e-commerce players and the warehouse operators. So getting a GST verification will smoothen your path, especially if you are into the logistics industry. It is because, at present, you can set up your warehouse in your strategic way and won’t have to bear the bill of paying extra taxes.
- Lesser Tax Compliances – Earlier the indirect tax structure was complicated as there was service tax, VAT and excise duty, which were charged at different levels in the supply chain. Even though most of us are unaware of these facts in our daily lives, it, nevertheless, creates an impact that hit all the citizens of India either directly or indirectly pretty severely. To solve this problem, GST was enacted to unify the overall tax structure into one. Having a GST registration and verification will not help you to stay under a unified tax structure but also will help you to have a clear understanding of the overall tax system. Besides, it will also lessen your costs of production and help you to save money.
- Avoid Complexity with Composite Scheme – If you are someone who runs a small business and your revenue generation is lower, then you may opt for the Composition Scheme under the GST. You might ask why do you need to go for a GST verification at all. The truth is, if you don’t want to make a loss, you should definitely go for a GST registration, no matter what the size of your business is. So having yourself registered and verified under the GST laws will definitely help you to lower your taxes and compliance burdens. It will benefit your earning which would eventually boost your revenue.
- Open Spaces for E-commerce Operators – The e-commerce operators who established their business before the implementations of GST, there were many VAT laws prevalent in the country. This made them suffer from a differential treatment, and there wasn’t any standard rule for their business, thus making them quite disorganised. But in the post-GST period, e-commerce operators have many open spaces with standard practices to conduct their business smoothly. Moreover, it makes things easier for them to operate across the States, that too under a unified tax structure.
A New-Insight for Restructuring your Business
The Goods and Services Tax has been into effect with a new-insight so that every organised and unorganised business sector could make a fresh start. The main aim of GST is to set a unified tax structure for the country. It has benefitted both individuals and industrialists alike, because, this GST verification will not only help you to generate more revenue for your business, but will also assist you in making the nation economically strong and powerful.