GST
Goods and Services Tax (GST) is an important indirect tax system implemented from 1
July 2017, which has been described by the government and economists as the biggest
economic reform since independence. With this new Goods and Services Tax, 17 central and
state taxes and 22 types of cess were reduced to just one. As a result, the complexity of
various taxes ended. Thus, significant simplification in indirect tax was achieved through GST.
Advantages of GST-
The old tax system suffered from many shortcomings like levying VAT again on excise already
paid to the centre, levying of many other indirect taxes like luxury and entertainment tax etc.
and provision of not taking input credit of Central Sales Tax. Hence a grand GST is needed to
utilise the credit by combining the rules of C GST and S GST. Overall, both the taxpayers and
the government will benefit from a simple tax system. Thus, the new tax system is better in
the following ways-
1. Make in India-
(i) Will help in creating an integrated common national market for India, promoting foreign
investment and Make in India campaign.
(ii) Harmonization of tax laws, procedures and rates.
2. Success in Business-
(i) Simple tax regime with fewer exemptions
(ii) All transactions are to be done through a common GSTN portal, minimising personal
contact between the taxpayer and the tax administration.
3. Benefits to consumers-
(i) The average tax burden on companies is likely to reduce, which is expected to reduce
prices, and lower prices mean more consumption.
(ii) The final price of goods is expected to remain low due to the free flow of input tax credit
between the manufacturer, retailer and supplier of services.
Goods and Services Tax (GST) is an important indirect tax system implemented from 1
July 2017, which has been described by the government and economists as the biggest
economic reform since independence. With this new Goods and Services Tax, 17 central and
state taxes and 22 types of cess were reduced to just one. As a result, the complexity of
various taxes ended. Thus, significant simplification in indirect tax was achieved through GST.
Advantages of GST-
The old tax system suffered from many shortcomings like levying VAT again on excise already
paid to the centre, levying of many other indirect taxes like luxury and entertainment tax etc.
and provision of not taking input credit of Central Sales Tax. Hence a grand GST is needed to
utilise the credit by combining the rules of C GST and S GST. Overall, both the taxpayers and
the government will benefit from a simple tax system. Thus, the new tax system is better in
the following ways-
1. Make in India-
(i) Will help in creating an integrated common national market for India, promoting foreign
investment and Make in India campaign.
(ii) Harmonization of tax laws, procedures and rates.
2. Success in Business-
(i) Simple tax regime with fewer exemptions
(ii) All transactions are to be done through a common GSTN portal, minimising personal
contact between the taxpayer and the tax administration.
3. Benefits to consumers-
(i) The average tax burden on companies is likely to reduce, which is expected to reduce
prices, and lower prices mean more consumption.
(ii) The final price of goods is expected to remain low due to the free flow of input tax credit
between the manufacturer, retailer and supplier of services.
