India is at the apex of revolution by bringing the GST on the rule. GST is a united tax system that transfigures the indirect taxation followed in India. On announcing the news of GST, people have the mixed reactions. But, the truth is there are various advantages related to it that can include tax payment, minimizing the tax fraud and bring success in the business.
Do Make In India and manufacturing process are interlinked?
In India, the contribution of numerous manufacturing processes is mere 16% of the total GDP. Introduced by Prime Minister Narendra Modi, the “Make In India” can bring a new change in the rules and give momentum to a different sector. According to PwC, in the coming time India will become the fifth largest manufacturing company. This purely indicates that GST has started working and shows an impact on the people.
Learn the influence of GST on manufacturing
At the present time, GST has brought a vast change in the policies and directly affects the manufacturing establishments. If we talk about the overall growth, then it absolutely brings a positive change. The reasons are many; some of them are mentioned here:
Simplification can be created by removing multiple valuations
According to the old tax schedule, the excise duty to the goods, all the things are calculated another way in different states. Some calculate on the basis of quantity, while others do by using transaction value. GST has made the calculation much easier for the manufacturer.
Cost of production can be reduced by entry tax subsummation
There is a major reason behind the reducing cost of services and products. The reason is subsuming of the entry tax that is required for the inter-state transfer.
Enhances the cash flow
Because of the new tax laws, the manufacturers can easily claim for the input tax credit on the goods. This shows a positive sign on the cash flow.
Easy registration process because of single registration
According to the old methods, each manufacturing process has to register separately even if it happens in the same state. On the GST arrival, you can go for single registration for all the manufacturing process within the same state.
Elimination of cascading can decrease cost-to-consumer
The cascading of taxes occurs when the manufacturers are not allowed for claiming the tax credit like central sales tax, entry tax and many more. With this, what manufacturer does is to pass the extra cost of the consumers that can cause a burden on them. But, when the GST announces, it removes all the multiple taxes and also reduces down the cost of production.
Reorganizing the supply chain
According to the GST law, if you are running a business, then you have to realign the supply chains. Therefore, most of the supply chains are now designed for managing the tax regimes.
On the whole, the impact of GST on the manufacturing companies is found to be positive and also it offers the solutions to the business to become a more profit oriented company. Go GST Bill – Free GST Software & Latest GST News can help you out in whole the GST process. Trust us!