In developing countries the share of indirect tax is much higher than direct tax. GST implementation allows the government to have a better grip on taxpayers. GST is meant to bring every indirect tax under a single roof. Before GST was imposed, business owners had to pay a total tax of that added up to 32%. But with the implementation of GST, the business owners pay tax of around 18-22%. The cascading effect of tax being paid on tax is not there since the introduction of GST.
GST allows small sized businesses to do business with ease due to less complexity. The GST Council has set a limit of annual turnover of Rs. 40 lakhs for registration under GST and businesses with turnover below the threshold do not require GST registration. This limit is further reduced to Rs. 20 lakhs in case of North Eastern states. Another advantage of GST is that it is a value-added tax and therefore is only imposed on the value addition.