7 Advantages of GST

Table of Contents

Before we start with the advantages of GST, letโ€™s a quick tour of what GST is all about.

What is GST?

Goods and Service Tax i.e. GST is a single, destination-based indirect tax levied on the value added to goods and services at each stage of the supply chain. It came into effect in India from 1st July 2017. This โ€˜one nation, one taxโ€™ reform absorbed most of the indirect taxes levied at the center and state levels. This brought about uniformity in terms of tax administration. Businesses providing products and services receive GST from customers and submit it to the government.

7 Advantages of GST

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Components of GST

There are 3 kinds of taxes under the Goods and Services tax:

State Goods and Services Tax (SGST): The Tax levied by the State Government.
Central Goods and Services Tax (CGST): The Tax collected by the central government.
Integrated Goods and Services Tax (IGST): The Tax applicable on inter-State supply of goods and services by the central government.

GST has influenced the Indian economy positively. This tax has taken out the inter-state barriers that hinder trade and has brought the whole Indian economy together in a single unified market. All Manufacturers, traders, and end consumers have benefited from GST.

What is the GST Bill?

A GST invoice is issued by a seller to the buyer of the goods or services. A GST Bill shows the names of the parties involved with all the details of goods or services supplied under a given transaction like:

  • Details of the Seller.
  • Details of the purchaser.
  • Product details.
  • Quantity of the goods.
  • Price with and without discount.
  • Terms of supply
  • Date of supply

Advantages of GST

Following are the benefits or advantages of GST:

Eliminates Cascading effect:

With the Idea of โ€˜One Nation, One Taxโ€™. By the creation of GST, or Goods and Services Tax all indirect tax would be brought under one roof. More importantly, it eliminates the Cascading tax effect which was observable before. We can describe this Cascading of tax effects as โ€˜Tax on Taxโ€™.

Uniformity of Tax within the country:

GST ensures that indirect tax rates and structures are common across the country. Hence, making the operations of a business easier and more certain. In other words, no matter where you are doing business the tax rate will remain unchanged throughout.ย 

Technologically Driven:

The GST regime is technology-driven and aligned with Indiaโ€™s digitalization, we may submit for GST online. The entire registration and return filing procedure has been speed up as a result of this. It also ensures that the process is transparent and that tax collection is done in a lawful manner. The GST Portal allows you to do the following things online.

  • Registration
  • Return filing
  • Apply for refund
  • Response to notices
  • Consumer grievances

Reduced Compliances:

The annual turnover for availing Composition Scheme was increased to Rs 1.5 crore from Rs 1 crore. A taxpayer with an annual turnover under Rs 1.0 crore can go for this Composition Scheme. For North-Eastern states and Himachal Pradesh, this limit stands at Rs 75 lakh.

Higher Exemption Limit:ย 

The annual turnover for availing Composition Scheme was increased to Rs 1.5 crore from Rs 1 crore. A taxpayer with an annual turnover under Rs 1.0 crore can go for this Composition Scheme. For North-Eastern states and Himachal Pradesh, this limit stands at Rs 75 lakh.

Exceeds Rs.40 lakh

Normal Category States

From 1st April 2019

Exceeds Rs.20 lakh

Special Category States

From 1st April 2019

Ease of operation for E-commerce businesses:

Without GST, for e-commerce businesses, the delivery of goods across borders came under variable tax laws. The delivery trucks crossing borders are required to produce the necessary documents along with the VAT declaration and registration number. With the advent of GST, the limits on interstate supply transportation have been relaxed.

Transparency of Taxes:ย 

With multiple indirect taxes levied by the Centre and State without complete to no input tax credits available at progressive stages of value addition, the cost of most goods and services are laden with hidden taxes. Under GST, there is only one tax in all stages of the, leading to transparency of taxes paid to the final consumers.

Improved competitiveness:ย 

Reduction in expenses due to repetition of taxes in business would eventually lead to an improved competitiveness for the trade and industry. The World bank feels GST and abolition of Inter state checkpoints is one of the most important measure to boost the competitiveness of India. As a result the manufacturing sector would profit.


Due to these advantages of GST, it has fostered a common seamless Indian market and contributes significantly to the growth of the economy. GST has reduced the cost of production and inflation in the economy. Hence, the Indian economy and trade industry are more competitive, both domestically as well as globally. Furthermore, it broadened the tax base and resulted in better tax compliance due to a robust IT infrastructure. The GST system encourages retailers to pay their taxes. As a result, the input tax credit is smoothly transferred from one stage to the next throughout the value addition process.


Swipe is a free GST billing software, that helps you track your sales, purchases & estimates in real-time. With Swipe, you can easily manage your inventory, file GST returns, and create & share professional invoices.

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