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All You Need to Know about Benefits of GST Registration

All You Need to Know about Benefits of GST Registration

Considered to be a monumental change in the tax system in India, GST or Goods and Services Tax has changed the overview of the tax system. Simple registration of a taxpayer under the Goods and Services portal allows the business to avail a number of benefits. The benefits of GST Registration are experienced differently by every business. The benefits of GST Registration are not only experienced by the business doer but the common public too. Though there exist benefits for all, there also exist variations in the benefits endured by different taxpayers. Benefits for a taxpayer involved in business activities are different than that of a common man. 

What is GST Registration? 

Coming into effect in the year 2017, the Goods and Services Tax included the Central Goods and Services Tax (CGST), the Integrated Goods and Services Tax (IGST), the Union Territory Goods and Services Tax (UTGST), and the Goods and Services Tax (Compensation to the States). Summarizing a number of taxes in to one has proven to be an efficient way of taxation, collecting information and regulating them. The taxes are as per the state and the center rules. While there exist central rules for the GST, there also exist state rules and regulations for each of the states. GST Registration is a simple process for availing of the aforementioned privileges. 

Benefits of GST Registration 

GST Registration introduced a new system of functioning, this was not only beneficial for the market and economy but also for the common man. Though the benefits of GST Registration largely lie with the trade and market, there also lies some benefit for the common public which are given below-  

Benefits of GST Registration to the Common Man  

  • Replacing all existing taxes, one of the leading benefits of GST registration is that it provides for a single more transparent form of taxation. 
  • The GST provides for the ease of doing business and eliminates hidden taxes. 
  • Filing for GST is a simple, one-click procedure for registration and filing tax returns. 
  • All taxes being cumulated together in an umbrella of GST and the provision of online registration has reduced the burden of filing multiple taxes. 
  • Cumulating all indirect taxes into a single bracket helps evade the tax on tax effect and supports businesses with major benefits. 
  • Aims to save the public’s money by having curb black money. 
  • GST allows the public to buy things at a cheaper rate than earlier. 

Economic Benefits of GST Registration to Industry and Trade 

  • Compiling all the taxes under a single umbrella, allows the taxpayer to undergo a limited amount of steps, i.e., limited compliance.  
  • The compiled taxes allows the taxpayer to file his/her taxes in one go, creating a lesser tax liability. 
  • Replacing all existing taxes, one of the leading benefits of GST registration is that it provides for a single more transparent form of taxation. 
  • The GST provides for the ease of doing business and eliminates hidden taxes. 
  • Another one of the benefits of GST registration is that once registered under the Goods and Services tax, the business is legally recognized as a supplier of goods and services. 
  • The registered person has the authority to collect taxes from his purchasers and pass on the credit of the taxes paid on the goods or services supplied to purchasers or recipients. 
  • Relevant compliance and payment structures along with financial provisions have been introduced with the aim to boost trade, accountability, and regulation of unorganized sectors. 
  • Cumulating all indirect taxes into a single bracket helps evade the tax on tax effect and supports businesses with major benefits. 
  • The benefits of GST registration allow one to make interstate sales without restrictions. It provides access to the national market across India. 
  • The major GST benefit is it being the umbrella of taxes which has reduced the burden of filing multiple taxes. The centralized system has reduced the unnecessary hassle for businesses. 
  • There are also other privileges and benefits of GST registration that can be availed by the taxpayer under the GST laws. 

Disadvantages of GST Registration 

There exist not only benefits of GST registration but also some disadvantages which are given below-  

  • Concerns were raised regarding the negative impact of the GST[1] in India. It was said that it may add up to the cost of homes and reduce demand for the same. 
  • It is put forth for such taxes that there have been no changes made in the tax system. The CGST and SGST are nothing but altered names for earlier existing taxes namely, Central Excise/Service Tax, VAT and CST. 
  • Taxes levied on some retail products would substantially increase, such as garments and clothes which would become more expensive with all the combined taxes. Similarly, the aviation industry would also experience the same rise in prices inclusive of taxes. 
  • Adoption and migration to the new GST system would involve teething troubles and learn for the entire ecosystem. 

Penalty for not registering under GST 

Being a replacement for the existing taxes, the Sales and Goods Taxes are similarly a compulsory tax that has to be paid by all the eligible members of the country. Taxpayers following under the eligibility criteria of GST registration are mandatorily supposed to register themselves and oblige as directed. There also exist penalties for not following the provided regulations. 

  • An eligible taxpayer not paying tax or making errors in payments – a penalty of 10% of the tax amount due subject to a minimum of Rs.10000. 
  • An eligible taxpayer deliberately evading paying taxes – a penalty of 100% of the tax amount. 

Conclusion

One of the biggest tax reforms in India was the introduction of the single tax system. The benefits of GST Registration are a way of improving business activities and helping provide support for budding startups. It provided for easier one-time tax payment and reduce unnecessary chaos. Since the Goods and Services tax is nothing but the value-added tax imposed on most goods and services sold for domestic consumption, the goods and services tax is forwarded to the government by the businesses. If you want to take GST Registration and in case you have doubt regarding the same, you can visit BizAdvisors.

Read our article:GST Benefits for Small Businesses & Start-ups: A Complete Guide

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