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The Goods and Service Tax was announced by the Indian government on March 29, 2017 in order to integrate state economies and boost the country’s overall economic growth. The GST is an indirect tax that includes all other taxes, according to the law. This Act went into force on July 1, 2017, and since then, the GST has superseded all previous taxes. GST is a sales tax that is applied at every stage of the transaction.
Businesses and consumers will benefit from GST because it eliminates the cascading effect of taxes and the economic obstacles that exist between states. For example, if a product has a 20% tax rate, this includes both federal and state government taxes. The vendor can manufacture in one state and sell to customers in other states without paying any taxes. Furthermore, consumers would only be liable to this indirect tax and not to any other taxes. GST assists the government in establishing a common market with standardised procedures, hence eliminating corruption.
GST is a value-added tax that is levied on the production, sale, and consumption of goods and services. GST is a unified taxation system that applies across the country.
Government of Atal Bihari Vajpayee, In India, who was the one who enacted GST? On July 1, 2017, at 12 a.m., Prime Minister Narendra Modi announced the implementation of GST. However, the GST has been in the works for for two decades, when it was first mooted by the Atal Bihari Vajpayee government.
1.Dual tax structure: Every supply of goods and services is subject to a central and state tax, known as the Centre GST (CGST) and State GST (SGST), respectively.
2. Integrated GST (IGST) on inter-state supplies: Integrated GST (IGST) on inter-state supplies, with revenue divided between the Centre and the Consumption state.
3. Taxable supply between two establishments pertaining to the same legal entity: The goods supplied by the agent to the principal are taxable. Employer’s “gifts” to employees that exceed INR 50,000 are taxable.
4. Imports and exports: All imports are considered interstate supplies and are subject to the IGST. All exports are exempt from tariffs.
5. GST Taxation Administration : There is no internet tax system, but there are GST Facilitation Centres, GSPs, and ASPs that help taxpayers file returns, register, and so on.
The central government is in charge of collecting direct taxes. Indirect taxes were previously collected by the federal and state governments, as well as local governments. For example, state governments imposed entry taxes and VAT in addition to the Central government. Local Bodies imposed additional taxes such as Property Tax, Water Tax, Toll Tax, and so on.
A large number of indirect taxes were absorbed into GST for better enforcement, tax payment, and compliance. However, many of us believe that the introduction of GST in the country has rendered all previous levies obsolete. On the other hand, there are still some taxes that are levied separately.
Notes : Even GST’s motto is “1 Nation 1 Tax”. Even though there are few taxes are not covered under GST as above.
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