GST In India - An Overview Insight

GST In India - An Overview

The Prime-Minister of India, Narendra Modi has launched the Goods and Service Tax (GST) on 30th June from midnight. According to the Govt., the tax is the biggest tax reform of India and can be beneficial for Indian Economy. It is an indirect tax which is introduced as The Constitution (One Hundred and First Amendment) Act 2017 following the 122nd Amendment Bill of Constitution. The Goods and Service Tax is governed by the GST Council and the Finance Minister of India is the chairman of the council. 

What is GST ?
It is a multi-stage, comprehensive, destination-based tax which will be levied on every value addition. It is the single tax that would be levied on the supply of goods and services. The manufacturers as well as the consumers have to pay it. The credits of input taxes paid at each stage would be available in the subsequent stage of value addition. In a word, GST would be charged on the value addition at each stage of a product. Thus the final consumer will bear only the GST charged by the last dealer in the supply chain along with the benefits of the previous stages.

Benefits of GST-
GST has several benefits for the business organizations, common people and the Government.
For Business Organizations-

• A comprehensive Information Technology system is there for the GST system to work properly and transparently. All tax related details would be available there and the tax payers can easily access the online system. 
• It ensures the uniform Tax Rate and Structure throughout India. Thus the citizen can do business anywhere in India under the ‘One Nation, One Tax’ system. There would be no cascading tax.
   
• The transaction cost must be reduced. Thus an improved competitive environment will be created among the business houses.  
• As all central and state taxes are submerged in GST, it will reduce the cost of locally manufactured products. That will boost Indian exports to the International markets.
  

For Government-

• GST is a replacement of all the indirect taxes including VAT which are levied from the goods and services. Implementation of GST must make the Tax System simple and easy.
•  It can prevent the leakage of tax. 
  
• Collection cost of different taxes would be minimized. That must ensure the higher revenue efficiency.
  

For Common People-

• Overall burden of different types of taxes is minimized
•  A single and transparent tax would be charged against all the good and services.

View of the Government-
According to the Govt. of India, the GST must help India to fight against corruption and black money. It is a ‘Good and Simple’ tool through which the people of every sector of India including the poor can get benefited. By the implementation of GST, the tax base of India has spread horizontally which would help  India to grow vertically.  

You May Also Like to Read:

• Pros and Cons of GST
• Frequently Asked Questions on GST