GSTLegal Advice

What are the Advantages and Disadvantages of Filing GST returns?

Do you want to know about the advantages and disadvantages of filling GST returns? Explore in the article below.

In India, the Goods and Services Tax (GST) was introduced in the Budget Speech on February 28, 2006. It laid the groundwork for a comprehensive reconstruction of India’s indirect tax structure. The Goods and Services Tax Act was approved by Parliament on March 29th, 2017, and officially went into effect on July 1st of the same year.

“Goods and Services Tax” may also be abbreviated as “GST.” It is an indirect tax that has taken the place of several other indirect taxes in India, such as the excise duty, the value-added tax, the service tax, and so on. A unified and all-encompassing tax is levied on each commodity and service that is created in India as well as those that are imported from other nations.

GST Bill

The Goods and Services Tax Bill has been given the government’s formal title of the Constitution Act, 2016. The purpose of this bill is to create a market that is more integrated and to consolidate the majority of indirect taxes into a single, all-encompassing tax. These taxes include the services tax, the central excise tax, the value-added tax, the tax on entertainment and luxury goods, the tax on lottery tickets, the implied cessation of goods and services, and the surcharge.

How is the GST Rate Determined

The Goods and Services Tax (GST) rate in India now ranges from 5 per cent to 12 per cent, 18 per cent, and 28 per cent. To determine their respective GST amounts, enterprises, distributors, manufacturers, and retailers may utilise the formula that is provided below:

You may calculate the GST with the help of several different tax calculators available on several sites. Some of the specifics that will be required to compute the GST include the return filing month, the due date of filing the return for the month, the filing date, the total tax obligation for the month, and purchases made in circumstances in which the reverse charge mechanism is applicable.

The Benefits of the GST

  • The Elimination of a Wide Range of Different Taxes

Since the establishment of the GST, there have been fewer restrictions placed on the various types of taxes that may be applied to goods and services.

Various taxes fall under this category, including the Central Excise Tax, Sales Tax, Service Tax, Luxury Tax, and Special Additional Duty levied by Customs. As a direct consequence, there are not many tax assessments placed on various commodities and services.

  •  Doing Away With the Cascading Effect

The most crucial benefit is eliminating the cascading effect, sometimes known as removing a tax on top of another tax. Before the Goods and Services Tax (GST) introduction, there was no mechanism for offsetting the value-added tax (VAT) on output against the service tax that was paid on input services.

Before registering for GST, calculate GST amount that needs to be paid using our GST calculator.

By enabling Input tax credits across a broad spectrum of products and services, the GST architecture aims to reduce the overall tax burden imposed on end-users.

  • The ease with which businesses may operate on both a national and international scale

Implementing the GST has resulted in a less onerous burden associated with reporting indirect taxes. In the past, almost every business faced significant challenges regarding excise customs, VAT registration, working with tax authorities, and other similar matters.

GST has gained a competitive edge in the worldwide market for products and services produced in the country as a direct result of an uptick in exports over the last several years.

  • The Control and Supervision of Unorganized Businesses

Previously disorganised and uncontrolled sectors in the nation, such as the textile and construction industries, have been subjected to regulation and are now required to answer for their actions.

The Goods and Services Tax (GST) is an initiative that aims to simplify the process of managing online payments and regulatory compliance. Input credit may only be obtained if the supplier accepts the price; this ensures that the regulated sectors are held to account. Finish the Process Via the Online Platform

Under the Goods and Services Tax (GST) system, contacts with tax officials would be restricted, and the whole flow of communications would take place online through a single gateway.

Electronic transactions and the internet system monitor tax fraud and avoidance without interacting with the relevant tax authorities.

  • Efficient Economy

The Goods and Services Tax (GST), which will eventually boost long-term economic development and efficiency, is unaffected by company models, methods, geographic location, or organisational structure. The ratio of taxes paid to GDP in India has increased due to the implementation the Goods and Services Tax (GST).

This tax that covers everything assures that working conditions will remain consistent and equitable. The Goods and Services Tax (GST) creates a unified national market and dispels common economic misunderstandings. Because of this, there will be greater compliance by voluntary action, and the cost of submission will be reduced.

Disadvantages of GST

  • The larger tax burden on SMEs

Only companies with annual sales of more than Rs.1.5 crore were required to pay excise duty under the former tax regime. This need has now been eliminated. Businesses with more than Rs.40 lakh yearly are required to pay the Goods and Services Tax (GST) under the new tax framework.

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  • Compliance Burden

Submitting three tax returns each month contributes to high compliance with the GST. Additionally, to continue doing business, corporations must register for the GST in each state in which they operate.

The process of registering with the regulatory body, issuing invoices that comply with the GST, maintaining digital records, and submitting returns have significantly stressed SMEs and other businesses.

  • An increase in overall costs

For companies to continue functioning normally after implementing GST, they needed to upgrade the accounting software they were using to either software compatible with GST or an ERP system. On the other hand, the expense of acquiring GST-compliant software, installing it, and educating personnel on how to use it may be high.

In addition, the expenses of running a company have grown for small firms since more enterprises are being forced to engage tax specialists to comply with the Goods and Services Tax.


The Goods and Services Tax (GST) was first implemented in India on July 1, 2017, and its implementation was a game-changing reform that changed how businesses were managed in the nation. The change has been enthusiastically embraced by all of the relevant parties. As a direct outcome of the GST system, many businesses are moving into the official sector. The huge nature of this change is likely to give rise to a number of challenges. The advantages and disadvantages of filing GST return that this minimal inconvenience will bring to the Indian economy will be numerous and long-lasting. You can get in touch with Vakilsearch for more help on this matter. 

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