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
far.
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
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Government, and will therefore, lead to higher revenue
efficiency.
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
consumers.