The tax structure will be made lean and simple
The entire Indian market will be a unified market which may translate into lower business costs. It can facilitate seamless movement of goods across states and reduce the transaction costs of businesses.
It is good for export oriented businesses. Because it is not applied for goods/services which are exported out of India.
In the long run, the lower tax burden could translate into lower prices on goods for consumers.
The Suppliers, manufacturers, wholesalers and retailers are able to recover GST incurred on input costs as tax credits. This reduces the cost of doing business, thus enabling fairer prices for consumers.
It can bring more transparency and better compliance.
Number of departments (tax departments) will reduce which in turn may lead to less corruption
More business entities will come under the tax system thus widening the tax base. This may lead to better and more tax revenue collections.
Companies which are under unorganized sector will come under tax regime.
Challenges for implementing Goods & Services Tax system
The bill is yet to be tabled and passed in the Parliament
To implement the bill (if cleared by the Parliament) there has to be lot changes at administration level, Information Technology integration has to happen, sound IT infrastructure is needed, the state governments has to be compensated for the loss of revenues (if any) and many more..
GST, being a consumption-based tax, states with higher consumption of goods and services will have better revenues. So, the co-operation from state governments would be one of the key factors for the successful implementation of GST