GOODS AND SERVICES TAX (GST)
WHAT IS GST?
Goods and Services Tax (GST) is an indirect tax which came into existence on 1st July 2017. It is a replacement of all the existing direct and indirect taxes which were levied by the state and central government. The administration of GST is carried out by the GST council and the Finance Minister of India is its chairman.
DIRECT AND INDIRECT TAXES SUBMERGED UNDER GST:
CENTRAL LEVEL TAXES:
Central Excise Duty
Additional Excise Duty
Additional Customs Duty(Countervailing Duty)
Special Additional Duty of Customs
STATE LEVEL TAXES:
Value Added Tax/Sales Tax
Entertainment Tax, Central Sales Tax
Octroi and Entry Tax
Taxes on lottery, betting and gambling
GST: ADVANTAGES TO VARIOUS SECTORS OF ECOMONY
BUSINESS AND INDUSTRY:
- Easy amenability: An inclusive IT system is the foundation of GST. All tax payer services are now available online. It is enabling an easy and transparent system of payment.
- Uniformity: GST ensures that the tax rates and structure is common across country. It provides a simplified form of doing business irrespective of the geographical norms.
- Benefit to the exporters and manufacturers: The merging of major Central and State taxes under GST, will consequently reduce the cost of locally manufactured goods and services.
FOR CENTRAL AND STATE GOVERNMENT:
- Easy to Administer: GST is quite easy and simplified version of other indirect and direct taxes.
- Higher Revenue Efficiency: GST is expected to decrease the cost of collection of tax revenue, as a result, will increase the revenue generated from GST.
FOR THE CONSUMER:
- Single Tax System Proportionate to the value of goods and services: The previous taxation system was laden with many hidden taxes. Under GST, there is just one tax from the manufacturer to consumer
- Relief in overall tax burden: Efficiency gains and prevention of leakages will consequently reduce the overall burden of tax on most of the commodities.
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