GST allows for seamless input credits for purchases of goods made both within and outside of a state, resulting in a reduction in raw material costs. This is because businesses can offset input GST against the output GST owed on sales. Moreover, service-related expenses such as audit fees, engineering consultations, and legal advice that incur GST can be counterbalanced against output GST. Previously, output excise/VAT could not be subtracted from the input credit of service tax paid. As a result of these changes, businesses can look forward to cost reduction.
***The effect on sales may change based on the sector and the GST rates.
