Question

The advantages of GST accruing to the Central/State Government are listed as:

• A. A unified common national market to boost Foreign Investment and Make in India campaign.
• B. Improving the overall investment climate in the country which will benefit the development of states.
• C. Uniform SGST and IGST rates to reduce the incentive for tax evasion.
• D. All of the above

Answer 1

The correct option is D All of the above

• Simple and easy to administer
  

GST replaces multiple indirect taxes at the Central and State levels. 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. All the management of GST would be handled by the GSTN.

• Better control on leakage
  

Because of the Advanced IT platform, it would be difficult to evade GST. The system of GST also promotes the tax payment.A businessman can claim tax credit only if it has the tax invoice for the purchase. If it doesn’t have tax invoice of a purchase, It has to bear whole tax. Thus, a retailer would ask tax invoice from the dealer and in return dealer would ask tax invoice from the manufacturer.The in-built mechanism in the design of GST incentivizes tax compliance by the traders.

• Higher revenue efficiency
  

GST is expected to decrease the cost of tax collection. It will lead to higher revenue efficiency. The duplication of indirect tax collection would end after the GST. It would finally decrease the cost of revenue collection. Both, the centre and state government would benefit.