Introduction:
Goods and Services Tax (GST) stands as a transformative force in India’s taxation landscape, simplifying processes and unifying markets. Enacted in 2017, GST replaced numerous indirect taxes, ushering in a new era of tax administration. This article aims to demystify GST, delving into its definition, evolution, and profound impact on taxation and compliance in India. Let’s embark on a journey to unravel the complexities and understand the essence of GST in India.
What is GST in India?
GST, known as Goods and Services Tax, is an indirect tax replacing several others like excise duty, VAT, and services tax in India. The GST Act passed in Parliament on March 29, 2017, and became effective on July 1, 2017. It’s levied on goods and services, designed to be comprehensive, multi-stage, and destination-based.
The Journey of GST in India In 2000, a committee began drafting GST law, which evolved over 17 years and passed in both Lok Sabha and Rajya Sabha in 2017. On July 1, 2017, the GST Law came into force.
Objectives Of GST:
Achieving ‘One Nation, One Tax.’ Subsuming most indirect taxes in India. Eliminating tax cascading. Curbing tax evasion. Increasing the taxpayer base. Implementing online procedures for business ease. Improving logistics and distribution. Promoting competitive pricing and consumption.
Advantages Of GST GST eliminated tax cascading, reducing goods costs. It’s technology-driven, accelerating processes online. What are the components of GST? GST comprises CGST, SGST, and IGST, applicable based on intra or inter-state sales.
Tax Laws before GST Before GST, both state and central governments imposed multiple indirect taxes, causing tax cascading. How Has GST Helped in Price Reduction? GST integrated the country with a uniform tax rate, reducing tax cascading and customer tax burden. What are the New Compliances Under GST? New compliances like e-Way Bills and e-invoicing aim to simplify tax procedures and reduce evasion. These measures streamlined tax processes and enhanced compliance in the GST regime.
