GST was firstly launched in 1954 in France. Currently, 160 countries in the world have implemented GST. As Canadian model of GST has federal structure, India has chosen the Canadian model of dual GST. GST stands for goods and service tax which is applicable in India since 1st July 2017, so July 1st is declared as ‘GST day’. More specifically, Asam was the first state to get applied with GST. During passing of the ‘GST Bill’ in the parliament, 336 votes were with it and 11 votes were against it. The previous structure of indirect taxes in India was very complex and quantitative taxes are levied by the central government and state government on goods and services. It has been a long pending issue to streamline a variety of indirect taxes and implement a ‘single taxation’ system.
GST requires businesses who have exceeded the prescribed threshold value to register and must keep the records of all inputs and outputs. It is exempted from few products such as alcohols, natural gas, motor spirits and crude petroleum products. GST is simple in calculation, simply multiplying taxable amount by GST rate. GST rates are covered under 5 tax slabs as 0%, 5%, 12%, 18% and 28%. Most goods fall under the tax slab of 5%, 12% and 18% while certain services are under 18%. Cement, tobacco lies under the highest tax slab of 28%.
The GST system is categorised into Central GST also known as CGST, State GST known as SGST and Integrated GST known as IGST. CGST is levied by central government, SGST by state government and IGST by central government on inter-state supplies. In short, while selling within the same state CGST and SGST need to be paid and in Inter-state IGST is.
Due to implementation of GST, the count of incidences of tax evasion came down in the country which brings an increase in tax collection for the government. GST has been implemented under the Article 279 of Indian Constitution. The existence of sales tax, service tax, custom duty, excise duty, VAT, Octroi tax etc. vanished. Moreover, A very common procedure for registration of taxpayers, refund of taxes, uniform format of tax returns. With minimum tax or even in no tax the exporters are encouraged to export with the best quality and increase the economy.
GST proved beneficial with more transparency, efficient compliance to central and state manufactures. GST assists in the growth of the Gross Domestic Products (GDP). GDP is expected to increase by 2%. Before the implementation of GST, the prices of the commodity were varying state to state. But, the prices became uniform throughout the country as the GST applied. The implementation of GST has proven a great decision for the country’s people. The common man has gained momentum in life due to GST. True life is lived when a little changes occur in it. In addition to all, GST makes the Indian companies more compatible with the foregin companies and Indian market more stable than the previous one.
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