As we have seen that GST is a boon to the Indian economy as it has increased the GDP of the country which in turn increases the no. of taxpayers and leads to increase in tax revenue for the government. GST favourably affect the Distributors or Wholesalers in the following way:
- GST is a unified tax that brings benefits to the distributor or wholesaler as it avoids the cascading effects of tax and simplifies the compliance procedure and open opportunities to consolidate suppliers
- GST cut down the cost of goods manufactured and distributed in India which in turn benefit the end consumer
- GST bring standard rates which is charged on all product all over India which removes the hurdles of large variances and different tax rates prevailed in VAT
- GST harmonizes central and state tax administration which in turn reduce duplication and compliance cost.
- GST automatize the compliance procedure which reduces errors and increase efficiency
- GST reduces the additional duty, CVD, special additional duty components of customs duty
- GST removes excise duty concepts which results in more manufacturing as GST is levied at the time of sale/supply of product rather than at the time of removal of products from the factory and that leads to more distribution and wholesale of the products
- In GST taxation event shift from manufacture, sale or provision of services to supply of goods and services hence branch transfer would be constituted as supply and would be taxable however eligible for full credit
- GST has made provision for removing the imposition of entry tax or octroi across India which indirectly benefits the wholesaler/distributor
- GST has widened the tax base, which is necessary for lowering the tax rates and helps in eliminating the classification disputes
- GST has replaced the most indirect tax in India which indirectly helps distributors/wholesalers to lower their tax burden
- In GST there is common formats for a tax return, payments, refund etc. Traders operating in multiple geographies across India find it easy to compliance
- GST nullify the cascading effect which lower down the price of goods and leads to increase in revenue trickling down to the distributors as the dealers pass on the benefit of reduced tax
- In GST tax burden equally divided among the whole supply chain which includes the wholesaler and distributors through lower tax rates by increasing the tax bases and minimizing the exemptions
