The roots of the tax system in India are very old. Tax or tax is also mentioned in ancient texts 'Manusmriti' and Chanakyarita 'Arthashastra'. It is mentioned in various texts that the ultimate objective of the tax system should be maximum social welfare. This is also the aim of the public welfare state.
For the same purpose, Goods and Service Tax = GST, which is the new indirect tax regime of the Government of India, was introduced on the territory of the entire country from 01 July 2017. With this, the biggest tax reform in the history of the nation came to be a reality. In the 1920s a German businessman Wilhelm von Siemens gave the idea of GST. Today more than 160 countries of the world have adopted this tax system.
The biggest tax reform -
After attaining independence, India's largest tax reform Goods and Services Tax (GST) was launched at a function held in the Central Hall of Parliament on the midnight of 30 June 2017. Most of the dignitaries including President Pranab Mukerji and Prime Minister Narendra Modi were present in it. President Pranab Mookerjee said that this historic moment is a happy ending to the long journey that began in December 2002.
Prime Minister Narendra Modi described the GST as a good and simple tax. He said that at the time of independence of the country, Sardar Patel had amalgamated the nation by merging more than 500 princely states. Similarly, the economic integration of the country is taking place through the GST. Now Ganganagar (Rajasthan) to Itanagar (Arunachal Pradesh). Till 'One Tax - One Country' will be echoed.
Features of GST-
After 70 years of independence of the country, 14 taxes have been abolished and one tax has been changed to GST. With the introduction of GST, now any goods will have the same price across the country; Because it is being uniformly taxed throughout the country. The industry, government and customers will all benefit from this. This will also intensify the government's 'Make in India' program. Its main features are-
Easy tax compliance,
Boon for family
Building a strong economic India,
Simple tax regime
Beneficial to the economy and
Beneficial for business and industry.
GST Categories -
Prices of most commodities of common consumption will be reduced by this single arrangement. GST is categorized into four categories, object-wise. The GST rate has been kept at zero on most items of use of the lower and middle class. Some goods and services are excluded from the purview of the GST. For example, open food grains, fresh vegetables, flour, milk, eggs, salt, flower bushes, education services, health services etc. have been exempted from tax. Sugar, tea leaves, edible oil, domestic LPG etc. will attract 5% GST.
12% GST has been imposed on butter, ghee, vegetables, fruits, food items, mobiles etc. 18% GST has been imposed on hair oil, toothpaste, soap, ice cream, computers, printers etc. A maximum rate of 28% has been applied to certain items of luxury as well as some other items. The cess will also be applicable for 5 years on items of this category so that any revenue loss to the states can be made up by the implementation of GST.
The GST rate is about 18% or less on about 81 percent of items.
The Central GST (CGST) has been implemented by the Central Government while the State GST (SGST) has been imposed by the States. The State GST will also be applicable in the Union Territories having legislature. In the union territories without legislature, the Union Territory of GST (UGST) will be applicable.
Integrated GST (IGST) has been imposed on interstate supplies.
The central taxes included in the GST are -
Cess and surcharge.
The state taxes included in the GST are-
Taxes on advertisements / lotteries / betting and gambling.
GST benefits - The multifaceted benefits of this single system of tax are
With the introduction of this system, integrated goods will create a national market, which will give impetus to foreign investment and campaigns like 'Make in India'.
This will reduce the burden of taxes on the general public.
This will provide more employment opportunities which will increase the domestic product GDP.
The country's products will be able to compete more in the international market.
Incidents of IGST and SGST being the same, the incidence of inter-state tax evasion will cease.
If the average tax portion of companies decreases, then the price of goods will also decrease and consumption will increase. With this, India will emerge as an 'industrial center'.
There will be uniformity in legal procedures and tax rates.
Thus, it should be expected that GST will bring gifts for every family and the nation will emerge more economically and progressively. Initially, there may be some difficulties while implementing it, but 'one country one tax system' will prove to be a milestone in the development of the country. This simple tax system will also benefit the business world.
In fact, the impact of GST will be seen even beyond the borders of the country. Under the rules of the World Trade Organization, the concerned countries can take advantage of this by linking them with imports by giving concessions in indirect taxes to the goods exported from them. Keeping in mind the far-reaching thinking of the development of the country, the tax structure has been given a progressive form by imposing more tax on the expensive items of luxury.
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