With your setup an external DAC is likely to help a great deal. Though not to everybody's ears, but for many.
But do note the DAC is the Asus Essence ST/STX is excellent for the price and pretty much as good as it gets if you buy an external DAC in the $150-200 range.
If you want a significant jump in sound quality, you would need to spend at least $500-1000 or more for your next DAC. Those DACs which are available in India locally are likely to cost Rs.55-75 per US Dollar as conversion rate, but if you import from abroad then you are likely to end up paying Rs.100-120 per USD once you factor in shipping and customs as well.
What is your max budget? What are your options?
A good DAC will help, significantly. But to get a decent jump you need to spend at least $500+ and to get a really decent jump you need to spend at least $1000+.
Thank You
Aakshey
PS: To notice the difference between 320 Kbps and FLAC you need a higher resolution setup. Even then so you need extremely picky ears and even then the differences are very subtle. So a much better DAC is not likely to make much difference there. But is likely to make everything audibly better I suppose.
If you can't notice the difference between 128 KBps and FLAC then I guess your ears are not trained enough to appreciate the better DAC too much either. You may hear some difference that you may prefer, but you may not, so you need to test and see.
The difference between 128 KBps and FLAC is huge, not so when comparing 320 KBps to FLAC which requires very revealing setups which are very neutral like studio monitors etc and still the difference isn't huge.
Thank You so much!
Aakshey