How Can Gst Reduce Tax Burden On People And Increase Government Revenue At The Same Time?

By Author: Mohit Yadev
Total Articles: 74
Comment this article

It isn’t a guaranteed thing that it will increase the revenue of the government but there are some points that are in favour of such a thing happening:
Easy compliance: Under GST it will be really easy to compute the amount of tax and file the same to the government, as the system to collect and monitor is all IT based it is much easier for a small trader to register itself on the portal and pay the taxes as required by him.
Better monitoring: Now with GST the manufacturer lets say makes something, he will be required to enter the details of his production and the goods and submit the tax on the online portal, suppose there is a trader who is selling an unauthorised goods of this manufacturer at higher profits by smuggling the same to another state without paying the state taxes to a wholesale retailer who enter the details of this product in his return as the tax he will say is already paid at one end and not required from his end (highly hypothetical example it seems like now :P) now at this end the government will be able to detect the anomaly in the flow of the goods and the trader can be caught. This will ...
... lead to more compliance.
Clarity: Baring sometime just immediately after the implementation of GST, there will be a lot of clarity to the taxes levied on goods, as it is difficult for the union govt. to monitor all the transaction happening on ground, manually, there is a significant taxes that slip through these cracks to either state employees (particularly police :P). These cracks will all be closed with the introduction of GST and the union govt. will have all the money from the taxes and that will be returned to the state govt. in accordance with their shares.
Increase in business activity: The GST will bring about some new avenues of opportunities for different supply chain management startups which were previously based on the tax saving objectives and not on supply chain optimization. There will be increase in trading activity as the goods will flow more freely to any state in the country without the worries of taxes being imposed on each entry or re-entry. This will in turn increase the tax base of the government and hence will give more revenues in turn.

Know More About GST Enrollment in India.