Good and service tax has been introduced as part of the restructuring or reformation of the Indian taxation system in order to make the system more transparent as well as simple. It is a multi staged tax and its imposition takes place jointly by both the central and state government with the recommendation of a GST council. The replacement of various indirect taxes has been done through this concept and has helped the government to achieve its programme of one nation one tax. 

Goods and Services Tax in India

The GST journey has begun in India’s taxation system with the passing of the act of good and service tax 29the march, 017 in the parliament that came into effect on 1st July 2017.  It is a designed transparent single tax that is levied on services and goods and replaces the previous structure of the indirect tax in India. Objectives of the GST include:

  • To subsume the indirect taxes in India
  • To reduce the cascading impact of taxes
  • To curb tax evasion
  • To promote competitive pricing and enhance consumption
  • To increase the taxpayer base

Importance of the GST Taxation System

The reformation of the taxation system by introducing the single tax has resulted in various benefits for the consumers, trade and government correspondingly. Those are as follows:

Trade: GST help to boost the tax neutrality regarding exported goods and also help to reduce the additional complexity with exemptions and rates that in turn enhance the trade flow respectively.  

Government:  with the simple and easy taxation system the government is also benefited in tax base broadening and increased revenue rate. 

Consumer: The reduction of goods and services cost due to the elimination of cascading impact of taxes help to increase the savings of the common man and enhance the consumer’s purchasing power respectively. 

Types of Goods and Services Tax in India 

Being a federal country, India’s status empowers the states and central to levy taxes. Different ways on the basis of the transaction have been implemented for different taxes under the taxation system. Different types of GST are as follows:

  • State GST: The state tax comes under the GST regime that is only applicable for the intrastate transaction of goods and is levied by the state government respectively. Furthermore, revenue that is earned through SGST is solely claimed by the state government.
  • Central GST: As SGST, this tax also comes under the GST regime and is governed by the central government and applicable to the same state’s transaction. 
  • Integrated GST:  This tax is also regulated by the IGST act and applied to the interstate supply as well as exports and imports. The central government is the responsible authority for the collection of this tax on goods and services. Revenue of this GST is divided among the states and the central government.
  • Union Territory Goods and service tax:  UTGST is governed by the UTs of India and applicable for the supply of services and goods in the Andaman and Nicobar Islands, Dadra, Nagar Haveli, Laksha deep, Daman Diu and others. Revenue that is earned is collected by the Union Territory government.  

Problems in the Goods and Services Tax system implemented in India

In the way of implementation of the concept of GST, several challenges are also there. Those are as follows:

  • Higher duty rates
  • Ambiguous provisions
  • Frequent amendments 
  • exemptions

Goods and Service Tax Portal 

The aim of the good and service tax is to build a unified taxes system that is entirely consumption-based. Various taxation bodies are there as the components of good and service tax such as Central GST, integrated GST and state GST. Central GST and state GST is applicable for good supplies within the state whereas the integrated GST is applicable for interstate imports and supplies. 

Conclusion  

It can be concluded that having a simplified system regarding taxation the government has been seeing a new era of taxation also benefits from the increased revenues in the economy. Moreover, the concept of GST would lead the country towards a brighter economy. The reduction of complications in the taxation system and its consequence would have been completely eradicated through the introduction of the good and service tax by the government in near future.