What is GST?
The Goods and Services Tax is an indirect tax that was introduced by the Indian government on 1 July 2017. Many countries had already adopted this rule of Goods and Services Tax. One tax has to be paid for all the things that is GST. However some things are also excluded from it such as alcohol. To give economic strength to the country and development of the country. It was very important to adopt GST. The tax percentage of GST is different for each type of item. The highest tax is levied on casual goods which is 28%.
This tax is levied on items and services, which are buying or enjoyed by us. For example – if we bought some goods, the tax is added to its bill or If we pay bill in a hotel, then service tax is added to it. As a result, GST has brought the whole of India under one tax regime, which saves time and reduces the tax burden.
Types Of GST
(1) Central Goods and Services Tax – CGST is a GST levied by the Central Government on the transaction of goods and services with a state or union territory. CGST replaces other central taxes such as Central Excise, Central Sales Tax, Custom Duty and SAD (Special Additional Duty) Tax.
(2) State Goods and Services Tax – SGST is a GST levied by the state on transactions of goods and services within the state. The state GST replaces the taxes levied by the state such as value added tax, luxury tax, entry tax, entertainment tax etc. Thus the revenue collected under SGST is claimed only by the concerned state government.
(3) Integrated Goods and Services Tax – While CGST and SGST are GSTs imposed on interstate (within state) transactions of goods and services; IGST means GST levied on interstate (between two states) transactions of goods and services. However, IGST is collected by the central government and later reimbursed to the respective state.
(4) Goods and Services Tax of Union Territories – UTGST is the GST imposed on goods and services transactions in these five union territories of India – Andaman and Nicobar Islands, Daman and Diu, Dadra and Nagar Haveli, Chandigarh and Lakshadweep. The total GST in the union territory is the sum of CGST and UTGST. The state GST does not apply to union territories, as it requires a legislature. The Union Territory of Delhi and Pondicherry have SGST, as they have their own legislature.
Advantages of GST
Due to GST, many taxes have been abolished such as VAT, service tax, entertainment tax, etc., which has greatly facilitated the people. Goods and Services Tax has the following benefits:
- Convenience to the people- Due to a single tax, it became easier for the merchants to pay taxes.
- Increase in accumulated tax- Due to being a tax, people have started paying taxes, which has reduced tax evasion and increased the tax with the government.
- Price drop in goods – Many goods were also cheap after GST.
Disadvantages of GST
- GST is a newly introduced tax system in India. A common man is unaware of how GST in addition works for citizens to use for past direct taxes. Therefore, it will take time to get familiar with GST.
- Also, all business software, accounting and ERP software processes need to be updated with the latest tax system.
- Some services will become expensive under GST such as – telecom, airlines, banking, insurance will be expensive under GST bill. Under new rules, requiring to file every month and compliance are more stringent, it can create a problem for small businesses.
You May also Read
| Essay on the Soldiers of the Indian Armed Forces | Read |
| Beti Bachao Beti Padhao Essay | Read |
| Swachh Bharat Abhiyan Essay | Read |
| Save Girl Child Essay | Read |
| Essay on Pollution | Read |
| Essay On GST | Read |
Conclusion – The main reason to bring GST is uniform tax regime. This has reduced the unnecessary tax burden of various (state and central) taxes on dealers.
Leave a Comment