Monday, 7 February 2022

GST

                                       Good and Service Tax


Introduction

Goods and Services Tax (GST) is consumption-based Tax and depends on the purchasing power of the consumer. The purchasing powers of consumer. The purchasing power of consumer basically depends on employment and employment depends on economy. The tax came into effect from 1st July 2017 through the implementation of the one hundred and first Amendment of the constitution of India by the Indian government. The GST replaced existing multiple taxes levied by the central and state governments. The GST bill, also referred to as the Constitution (121 Amendment) Bill, 2014, it initiates a value added Tax to be implemented on India level. The Goods and Services Tax is an Indirect Tax. It is levied at all stages of production to bring about uniformity in the system.


Objectives of GST


  • Important objective of GST is to create a common market with uniform tax rate in India.

  • To eliminate the Cascading effect of Taxes, GST allows set off of prior taxes for the same transactions as input tax credits.

  • To boost Indian export, the GST already collected on the inputs will be refunded and thus there will be no tax on all exports.

  • To increase the tax base by bringing more number of tax payers and increase tax revenue.

  • To simplify tax return procedures through common form and avoidance of visiting tax departments.

  • To provide online facilities for payment of taxes and submissions of forms.


Types of GST


As per newly implemented tax system, there are 4 different types of GST:


  1. Integrated Goods and Services Tax (IGST)

  2. State Goods and Services Tax (SGST)

  3. Central Goods and Services Tax (CGST)



Additionally, the government has fixed different taxation rates under each, which will be applicable to the payment of Tax for goods and, or services rendered.


Integrated Goods and Services Tax or IGST


The Integrated Goods and Services Tac or IGST is a tax under the GST regime that is applied on the interstate supply of goods and services as well as on imports and exports. The IGST is governed by the IGST Act, Under IGST, the body responsible for collecting the tax is the Central Government. 


State Goods and Services Tax or SGST

The state Goods and services Tax or SGST is a Tax under the GST regime that is applicable on intrastate transaction. The revenue earned through SGST is soley claimed by the respective State Government. 


Central Good and Services Tax or CGST


Just like state GST, the central goods and services is a tax under the GST regime that is applicable on intrastate transactions. The CGST is governed is governed by the CGST Act.


Union Territory Goods and Services Tax or UTGST


The Union Territory Goods and Services Tax or UTGST is the counterpart of state goods and services Tax which is levied on the supply of good and/ or services in the Union Territories (UTS) of India. The UTGST is governed by the UTGST Act.


Conclusion




The Main objective of the government is to bring India in an umbrella of one tax promoting the “One Nation one Tax” system. With the imposition of GST was a big task in a country like India. In this system, where new changes are not easily accepted. It was a very complicated system to understand at first but later it is coming out as a long term benefit for the country. There is the various sectoral impact of goods and services Tax. It is excepted that there is an expectation of the growth of the Indian Gross Domestic Product (GDP).



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