GST or Goods and Service Tax is significant step towards Indirect Taxation system in INDIA. The filtration process of the indirect Tax System in India started from 1986 in the mode of Modified Value Added Tax. The aim to introduce GST in India is to bring our country under the umbrella of One Country- One tax Regime. It is the 101st Amendment Act, 2016 and is chaired by the Ministry of Finance (Arun Jaitley). This taxation system aims to amalgamate the indirect taxes imposed by the Central and State Government and will help to bring uniform economic reform in the country in the form of facilitating Common National Market.
GST tends to bring Central and State Tax, Vat, Service Tax, Excise Duty and other subjects which are coming under the ambit of indirect tax system.
Benefits of GST-
GST focuses to bring uniformity in the tax structure and predictable tax regime within the country. GST is going to benefit tax payers in the following ways:-
- It will bring transparency in the tax in the tax regime.
- It will help to reduce tax evasion and henceforth revenue will get a boost up.
- Manufacturing industry will be more competitive.
- Consumers will not be subjected to double taxation.
- GST is anticipated to boost up the economic growth of the country by 2%.
- Logistics sector are going to have great benefit in this tax regime.
- It will help the foreign companies to do business in India in relax manner.
- It will help in reducing the price of goods and services.
Centre has requested the States to grant the GST legislation by the end of May 2017 such that it can be made in to effect from July 2017.
Securities Transaction Tax (STT) which is governing the sale and purchase of securities is not coming under the fold of GST. Ministry of finance has not taken securities market under GST and has kept it free to be governed b y the STT.
Although India is planning to have Dual GST System – Central Goods and Service Tax (CGST) and State Goods and Service tax (SGST). The dual GST system will work on the basis of intra state supplies (SGST) and interstate supplies (CGST). Again business having the turnover of less than Rs. 20lakh is exempted from GST whereas business having the turnover of more than Rs. 20 lakhs has to pay GST.
However economic expert are suggesting that GST will be fruitful to the nation. It is regarded as the plethora of benefits all around by boosting the economic situation by bringing clarity in the functioning of the economy. It is the tax reform which was undertaken since 1986 but no significant work was done to put it into action. Presently NDA government is acting upon it to bring all the indirect tax under one uniform tax regime. Economist, business groups are optimistic in the implementation of GST. Now it is to see how GST transmits the plethora of fruits all around despite of pessimistic political action and reaction.
