Short note on GST: A Boon or Bane

GST is Goods & Services Tax on products and services. This indirect tax has superseded different indirect taxes that previously existed in India, such as Value Added Tax, excise duty and services tax. The parliament of India passed the Goods and Service Tax Act on March 29, 2017, and it was incorporated by July 1, 2017. To put it in another way, the GST is a tax levied on the provision of goods and services. For tax collection purposes, goods and services are separated into five tax slabs: 0%, 5%, 12%, 18%, and 28%. On the other hand, petroleum items, alcoholic beverages, and electricity are not taxed under GST. Instead, they are taxed separately by different state governments, as was the case under the old tax structure.

Define the Tax Policy of India

The Indian Constitution grants governments the authority to charge taxes in India under the Indian tax system. The Indian tax system mandates that the government collect taxes from its residents to create revenue for public-works projects and to enhance the country’s economic standing. The Indian tax system allows ordinary taxpayers to arrange their taxes and save the most money possible. Furthermore, if a person puts money in a tax-saving instrument, they may be eligible for a tax break. Let us take a closer look at the many forms of taxes in India and their benefits.

Different Types of Taxes in India

Under the Indian tax system, there are primarily two types of taxes, which are further subdivided into various categories:

Direct taxes in India:  Direct taxes or tax policy in India are those that are levied directly on an individual’s or taxpayer’s income, according to the Indian tax system. The Central Board of Direct Taxes oversees the direct taxes in India, and they cannot be transferred to another person or legal body. The different categories of direct taxes are:-

• Fringe Benefit Tax
• Securities transaction taxes
• Wealth Tax
• Income tax
• Expenditure Tax
• Gift Tax
• Estate Duty

Indirect taxes in India: In India, indirect taxes are levied on items and services when they are traded. Under the Indian tax system, these taxes are collected by the vendors of the service or commodity. The tax is added to the initial price of the goods or service, increasing its price. The many types of indirect taxes in India are listed below. The different categories of indirect taxes (tax policy) in India are:-

• GST
• Customs Duty
• Excise
• VAT
• Entertainment Tax

What Do You Mean by Supply?

In general, supply refers to the total amount of goods & services a manufacturer is willing to provide at a given price and location. Section 7(1) of the Central Goods and Services Act states that supply comprises

• All supply of goods and services are made for a price by a person during his business sale, manufacture, leasing, transfer, and disposal.
• Importation of services
• All the activities classified as the supply of goods under schedule 2 of the central goods and services act 2017 are listed in schedule 1 of the act.
• All of the operations listed in Schedule 3 of an act and all central government and state government transactions will treat providers of goods and services, according to Section 7(2).

Scope of supply

Supply of Goods and Services

The CGST Act of 2017 determines what items and services would be considered supplies. Money and securities have been exempted from the definition of goods and services; activity involves the use of money, or if money is converted into another denomination at any stage of the transaction, that activity will fall under the definition of goods and services if a different consideration is provided. In addition, schedule 2 of the act specifies that all actions may be included in delivering goods or services.

Supply for Business

GST is a tax. Hence it only applies to transactions & activities carried out in the course of business; if activity and transaction are carried out in a personal capacity, they will not be taxed under GST. If imports are made for consideration, there is an exemption to this requirement.

In the Taxable Territory, Supply

Another prerequisite for determining whether an activity is classified as a supply or not is to establish whether the activity and transaction occur within the taxable region; for GST to be applied, the transaction must occur within India.

Good and Service Tax: A Boon or Bane

GST’s implementation in India is a turning point in the country’s economic development. The actual benefits of GST will be realized by our next generation. The GST is a huge blessing as it will assist our country in swiftly joining the ranks of developed nations. The Goods and Services Tax (GST) will be a broad-based tax that would apply to the production, purchase, and consumption of products and services in India. GST is one of the country’s most significant post-independence tax reforms, as it will integrate all state economies and increase the overall growth of the nation.

Conclusion

In the above topic, we have read about the GST’s significance. We have read about the various tax policy, transactions between states and the supply of Goods and Services. The Goods & Services Tax (GST) is the indirect tax on India’s supply of goods and services. It is a value-added tax applied on most products and services sold for residential use. On July 1, 2017, India introduced it as a total indirect tax for the entire nation. It’s a multi-stage, destination-based tax, and it’s comprehensive because it includes practically all indirect taxes, except a few state taxes. It is a tax paid by consumers and paid to the govt by businesses that sell products and services.