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    Impact of GST On Manufacturing Sector

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    Gunjan Agarwal
    GST has benefited India's manufacturing sector in several key ways: (1) It simplifies taxation by replacing multiple taxes with a single transaction-based tax, reducing costs; (2) Eliminating entry taxes across state lines lowers production costs; (3) Improved cash flows through input tax credits. Additionally, (4) Single registration allows manufacturers to register all plants within a state together, simplifying the process. Finally, (5) Removing cascading taxes leads to lower consumer prices by reducing overall production costs.

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    Impact of GST On Manufacturing Sector

    Uploaded by

    Gunjan Agarwal
    143 views2 pages
    GST has benefited India's manufacturing sector in several key ways: (1) It simplifies taxation by replacing multiple taxes with a single transaction-based tax, reducing costs; (2) Eliminating entry taxes across state lines lowers production costs; (3) Improved cash flows through input tax credits. Additionally, (4) Single registration allows manufacturers to register all plants within a state together, simplifying the process. Finally, (5) Removing cascading taxes leads to lower consumer prices by reducing overall production costs.

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    Impact of GST on Manufacturing Sector

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    GST has benefited India's manufacturing sector in several key ways: (1) It simplifies taxation by replacing multiple taxes with a single transaction-based tax, reducing costs; (2) Eliminating entry taxes across state lines lowers production costs; (3) Improved cash flows through input tax credits. Additionally, (4) Single registration allows manufacturers to register all plants within a state together, simplifying the process. Finally, (5) Removing cascading taxes leads to lower consumer prices by reducing overall production costs.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    143 views2 pages

    Impact of GST On Manufacturing Sector

    Uploaded by

    Gunjan Agarwal
    GST has benefited India's manufacturing sector in several key ways: (1) It simplifies taxation by replacing multiple taxes with a single transaction-based tax, reducing costs; (2) Eliminating entry taxes across state lines lowers production costs; (3) Improved cash flows through input tax credits. Additionally, (4) Single registration allows manufacturers to register all plants within a state together, simplifying the process. Finally, (5) Removing cascading taxes leads to lower consumer prices by reducing overall production costs.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Impact of GST on Manufacturing Sector

    Introduction
    GST is an acronym used for Goods and Services Tax. This tax brought a revolutionary
    change in the field of taxation. The impact can be seen on various industries, how
    tremendously it changed the business structure and taxation regime in India. In this article
    focus has been placed on the ‘manufacturing sector’. The benefits which this sector has
    reaped from the GST implementation are discussed in detail.

    Make In India & Manufacturing


    The manufacturing sector in India contributes a mere 16% to the overall GDP. However, the
    potential to make this a high-growth and high-GDP sector is huge. The “Make in India”
    campaign by Prime Minister Narendra Modi makes this possibility real, by giving impetus to
    the sector.

    Removal of multiple valuations will create simplification:


    GST will usher in an era of transaction-based valuation, making calculation of tax much
    simpler for the manufacturer.

    Entry tax sub summation will reduce cost of production:


    The subsuming of the entry tax for inter-state transfers is a key reason for reducing cost of
    goods and services.

    Improved cash flows:


    Under the new tax laws, manufacturers can claim input tax credit on input goods, which
    seems to be a positive sign for cash flow. SMEs are keenly observing the time difference
    between input tax credit and the credit being available.

    Single registration process will provide ease of registration:


    The old regime required manufacturers to register each manufacturing facility separately,
    even those in the same state. GST will simplify the plant registration process by allowing
    single registration for all manufacturing entities within the same state.

    Removal of cascading will lead to lower cost-to-consumer:


    The unified GST regime will eliminate multiple taxes and thus lower cost of production; this,
    in turn, will mean lower pricing for the consumer.
    Restructuring of supply chain:
    To align with the GST law, businesses will be required to realign their supply chains. With a
    single tax regime, this will change, and supply chain structures will focus on driving business
    efficiencies.

    Conclusion
    Therefore, it can be concluded that GST has benefited the manufacturing sector in a number
    of way. It has helped the sector to grow and flourish, hence contributing to the economy of
    the country. The advent of GST will help the country to grow as a whole as it also helps to
    detect the tax evasion by various tax payers.

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