| Impact | Earlier | Now |
| 1.Ease of commencement of businesses | A business having operations across different state needs VAT registration. Different tax rules in different states lead to complications and a high procedural fees. | Under GST, the registration is centralized and the rules are uniform for all the states across the country. All you have to do is complete and submit an online form to obtain a GSTIN. |
| 2.Relief in registration limit for small businesses | VAT Registration is required where the business turnover exceeds Rs.5 lakhs. | Under GST, registration is required where the business turnover exceeds Rs.20 lakhs. Also, under the composition scheme, businesses with turnover less than Rs.1.5 Crores will pay GST at a nominal rate. |
| 3. Reduced cost of logistics | There were long queues at checkpoints and inter-state entry points, which resulted in vehicles remaining idle for long periods of time, adding to labour and fuel costs. Businesses engaged in inter-state transport of goods had a hard time filing paperwork and paying entry taxes at the inter-state borders, delaying the delivery of goods. | The Central Sales Tax (CST) on interstate sales is replaced with a combined tax called IGST, which is composed of CGST and SGST and collected by the Central Government. As the removal of border and check-post taxes makes state boundaries less significant under GST, both the delay and the transportation cost will be reduced. |
| 4.Elimination of distinction between goods and services | Businesses providing both goods and services had to calculate the VAT and service taxes individually. | GST eases the process by removing the distinction between goods and services; tax will be calculated for the final total, not individual products or services. This will help SMEs take advantage of the tax incentives for payment on the procurement of input goods and services. |
| 5.Accurate record of Transactions with respect to ITC paid maintained | Businesses used to furnish a declaration based on transactions carried out at year end. High level of discrepancy between Actual Input Credit and Furnished Input Credit. | With the advent of GST, separate Returns are made available to keep track of ITC paid for purpose of availment. Reduced level of discrepancy as information is furnished on monthly basis. |
| 6.Swift Refund Process instilled in the GST Regime | Refund process would comprise of heavy paperwork procedure with varying Forms & Documents resulting in a hassle for taxpayers. | Refund process has now been completely digitalised via portal features where the tax payer can enable timely refund without any sort of heavy documentation. |
