GST: AN ECONOMIC REFORN WHICH CAN REVAMP THE INDIAN ECONOMY

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GST

        AN ECONOMIC REFORN WHICH CAN REVAMP THE INDIAN ECONOMY

OUTLINES

• WHAT IS GST ?
• ROLLOUT OF THE GST.
• LEVIES IN GST.
• RATES FOR GOODS AND SERVICES TO BE TACED.
• FILLING OF GST RETURN.
• CONCLUSION.

        THE  122nd Amendment Bill of the constitution of India, introduced a National Goods and Services tac in India from 1st July,2017

    

             Goods and Service Tax (GST) in India is a comprehensive (including nearly all elements or aspects of something), Multi-stage, destination based tax that is levied on every value addition. Goods and Services Tax. (GST) is an indirect tax levied when a consumer buys a good or service. GST has replaced many indirect taxes that previously existed in India. This act was passed in the Parliament on 29th March, 2017 and came into effect on 1st July, 2017. India's current Tax scenario is riddled with various indirect taxes which the GST aims to subsume with a single pan India comprehensive tax, by bringing all such taxes under a single umbrella.

After 17 years of continuous efforts the present Goods and Services Tax law has come into effect. The journey of GST in India was not simple unlike to other. From 2000 to its implementation in 2017, it has gone through many changes.

The Goods and Service Tax is being rated as the most reformative measure proposed in the field of Indirect Taxation in the history of India. It has been termed a potential gamechanger, the single biggest tax reform undertaken by India in 70 years of Independence.

The rollout of the Goods and Services Tax (GST) on 1st July, 2017 in a single stroke convert India into a unified, continent-sized market of 1.3 billion people. It will bring uniformity of tax rates and structures across the country. It will increase certainty and case of doing business i.e. make it tax neutral, irrespective of the choice of place of doing business in the country.

            

In order to I understand the features an objectives of GST Act, first we need to take quick look on the previous taxation system. Previously taxes were charged on every stage viz excise on manufacture, VAT/CST on sales, entry tax on entry of goods in local area etc. This cascading effect of tax i.e. tax on tax results in hiking the prices of goods or services. These taxes were imposed by the Centre and State differently according to the lists in the Constitution of India. Now the new concept of GST is that the GST would be a single tax system which would be levied on 'supply' of goods and services and this tax will be jointly imposed by the Centre and the State with the recommendation of a Federal Institution created, the GST Council.

            There would be three different types of levies in GST: (i) CGST, ) IGT and (1) SGST/UTGST refers to the Central GST tax that is levied by the Central Government of India on any transaction of goods and services tax taking place within a state. CGST replaces all the existing central taxes including Service Tax, Central Excise Duty, CST, Customs Duty, SAD etc. The rate of CGST is usually equal to the SGST rate. Both taxes are charged on the base price of the product.

            IGST (Integrated Goods and Service Tax) is applicable on interstate (between two states) transactions of goods and services as well on imports. This tax will be collected by the Central government and will further be distributed among the respective states. IGST is charged when a product or service is moved from one state to another.

            SGST (State Goods and Service Tax) and UTGST (Union Territory Goods and Services Tax) are applicable on the goods and services supply that take place in respective states and Union Territories. It replaces all the existing state taxes including VAT, Central Sales Tax, Purchase Tax, Luxury Tax, Entry Tax, Entertainment Tax, Taxes on advertisements, lotteries, betting, gambling and state case and surcharge.

            The current form has four rates for goods and services-0%, 5%, 12%, 18% and 28% and excludes five hydrocarbons-crude oil, petrol, diesel, jet fuel and natural gas as well as liquor, real estate and electricity from the purview of GST.

            Since India has different GST tax rates compared to a single GST rate in most prosperous nations across the globe, the national economy would undergo a major shift from the times of multiple taxes. From a common man to the riches, the word GST will have significant bearing. While some goods and services would become cheaper, others may just take out more from the pocket of the consumers, With the introduction of Goods & Service Tax, taxpayers are now required to fulfil a set of compliances which mandates them to file multiple returns for each Financial year. Some of these are monthly requirements where details regarding invoices raised as well as received has to be filed with the GSTN.

       GST Council and the Ministry of Finance live come up with a great solution to record all such invoices in one place and collate data for the as par year. The processes have been simplified and many taxes have been owned The whole nation shall report using the same structure respective of where and how you carry your business. A widespread IT has been deployed by the Ministry to cope up with such a huge of data. It is called the GSTN (Goods and Service Tax Network) t will house all the information of sellers and buyers together, elaborate the details submitted and even maintain 3 registers for you for future reference and anytime reconciliation.

            For properly updating the invoices, Indian taxpayers and businesses have to file certain returns with the Government. These returns have to be mandatorily filed as any non-compliance towards the same may lead to disallowance of input tax credit, apart from attracting penalties and stress etc. Proper filing of information and passing the same in the return is a mandatory process for smooth flow of credit to the last recipient. The returns have been designed so that all transactions are in 5 with each other and that no transaction is left unattended between the buyer and the seller. The tale starts from GSTR-1. All the data is stored in GSTN, which can be accessed by users/taxpayers anytime online.

        

            The impact of GST on macroeconomic indicators is likely to be very. positive in the medium-term. Inflation would be reduced as the cascading sur son tax) effect of taxes would be eliminated. The revenue from the for the government is very likely to increase with an extended tax and the fiscal deficit is expected to remain under the checks. Moreover, would grow, while Foreign Direct Investment (FDI) would also . The Industry leaders believe that the country would climb several ask in the ease of doing business with the implementation of the most important tax reform ever in the history of the country

        Goals and Services Tax has all the ingredients of a modern, seamless train system, But its success will depend on taking onboard all the stakeholders and eliminate all the irritants which goes against the principles of GST. Goods and Services Tax will also contribute towards a macro-economic , thereby increasing investor sentiments, likely, the consumers will be ultimate beneficiary as it would eliminate the cascading effect of taxes.