Any
regulation change in taxation usually either means more taxes or difficult
procedure. Either ways such kind of change in regulation is usually opposed by
people. However the proposed Goods and Service Tax regulation is aimed at
simplifying the current taxation structure and reduce the cost of total tax
borne by end user. Convenience to the honest tax payer and disincentivising the
tax evaders are two major benefits of this method of taxation.

To explain
in a nutshell, when you purchase goods from one state you pay sales tax (CST)
and when you  sell that goods in another state you have to pay VAT again.
So there is a “double taxation” of the same goods and of the same transaction
as you do not get credit of tax already paid. What GST aims at is in the above
situation you have to pay tax only on the increase in sales value and you get
the credit of the tax you have paid while purchasing.

Biggest benefit
will be that multiple taxes like  central sales tax, excise duty, service
tax state sales tax, entry tax, entertainment tax, luxury tax, turnover tax
etc., will no longer be present and all that will be brought under the GST.
Apart from the avoidance of double taxation the biggest benefit is to reduction
of compliance costs. The paper work is going to be reduced as there will be
single authority to file returns, assessments and appeals. So unproductive work
like maintaining separate records, meeting different consultants and complying
with different departments will be reduced.

This is a
tremendous benefit to any size of business and in particular National players.
These tax savings eventually get passed on to consumers. Moreover small
businessmen will get input credit of taxes they pay on varied services. As of
now Service Tax paid was not used as a credit for payment towards Central Sales
Tax. However in GST you can take benefit of service tax paid on telephone
bills, AC service charge, computer AMC, Internet expense etc.

Doing
Business now will be easier and more comfortable as various hidden taxations
will not be present. Starting a new business will be easier and hence the
consumers will have the luxury of multiple choices for whichever goods or services
he wants. This automatically keeps prices in check and ensure that the benefits
of decreased taxes be passed on to the end users.

The rate of
tax may seem high and for the first year end consumer may have to pay higher
tax, however after the first year the tax burden will reduce. Combined with
increased competition, no double taxation and reduced paperwork – end user is
definitely going to reap the dividends.

Overall GST
is the change India needs today to see a better tomorrow.