The Goods & Services Tax (GST) At A Glance
The Goods And Services Tax (GST) has its own history in India, the GST that we see today getting added to almost every product that we purchase to all the services that we avail had its own journey. A journey that faced way too much struggle for coming into existence! Interestingly, most of us do not know much about the implementation and the types of the GST along with the super valuable benefits of this Goods & Services Tax (GST). So here, in this write-up we shall cover these points!
Concept of the GST –
GST stands for Goods and Services Tax. It is an Indirect tax, which introduced to replacing a host of other Indirect taxes such as value added tax, service tax, purchase tax, excise duty, and so on. GST levied on the supply of certain goods and services in India. It is one tax that is applicable all over India.
The History of GST’s Implementation –
The President of India and the Government of India launched the GST at midnight on 1 July 2017. The launch was marked by a historic midnight (30 June – 1 July) session of both the houses of parliament convened at the Central Hall of the Parliament. Several high profile guests attended the session from the business and the entertainment industry including Ratan Tata. However, the Congress Party including a few other opposition parties boycotted it as they do with any reforms that the Modi Government brings. It is one of the few midnight sessions that have been held by the parliament – the others being the declaration of India’s independence on 15 August 1947, and the silver and golden jubilees of that occasion. After its launch, the GST rates have been modified multiple times, the latest being on 22 December 2018, where a panel of federal and state finance ministers decided to revise GST rates on 28 goods and 53 services.
Types of GST –
Well, most of us are aware about the two types of GST, the central & the state one as we see in the billings. However, there are 4 different types of GST.
- Central Goods and Services Tax: CGST is charged on the intra state supply of products and services.
- State Goods and Services Tax: SGST, like CGST, is charged on the sale of products or services within a state.
- Integrated Goods and Services Tax: IGST is charged on inter-state transactions of products and services.
- Union Territory Goods and Services Tax: UTGST is levied on the supply of products and services in any of the Union Territories in the country, viz. Andaman and Nicobar Islands, Daman and Diu, Dadra and Nagar Haveli, Lakshadweep, and Chandigarh. UTGST is levied along with CGST.
Benefits of the GST –
The Goods And Services Tax (GST) has been considered highly valuable as it benefits the Common Person of the country, the Indian Economy, and the Industries & Trades of India in its own way, which needs to highlighted separately.
A) Benefits to the common person –
- A good number of products and/or services are either exempt from tax or charged at 5% or less.
- The poor will receive their due.
- Small traders will find themselves on a level playing field.
- Simplified tax structure with fewer exemptions.
- Products and services will be allowed to move freely across the country.
- Increased competition between manufacturers and businesses will benefit consumers.
- Items such as movie-ticket prices, two-wheelers, televisions, stoves, washing machines, SUVs and luxury cars, two-wheelers, etc. will be cheaper.
B) Benefits to the Economy –
- Creation of a unified common market.
- Increase in manufacturing processes.
- Enhancement of exports and investments.
- Generation of more jobs through enhanced economic activity.
C) Benefits to Industry and Trade –
- Uniform procedures for registration, filing of returns, payment of taxes, and tax refunds.
- Elimination of cascading of taxes thanks to the seamless flow of tax credit from the supplier or manufacturer to the retailer or user.
- Small-scale suppliers can make the most of the composition scheme to make their goods less expensive.
- Higher efficiency with regards to the neutralization of taxes so that exports are globally competitive.
Unfortunately, even after being such a highly valuable asset to the nation, the GST has been excessively politicalised. The even sadder part is that a large section of the people in India do not understand the benefits of the GST and sees it from the point of the view of the political party that they support. Now, this is highly dangerous for a growing economy like India, as if a particular political party do not support GST, just to mess with the government, even after knowing the benefits of the GST, then the supporters of that particular political party will simply deny accepting the benefits of the GST.
Well, this is nothing but purely a high-level stupidity; surprisingly the people with great degrees from reputed institutions behave like this just because the parties for whom they vote are against the GST. Therefore, the aim of this write-up is to make the people aware of the highly valuable benefits of the GST and at least have the basic understanding of the GST. People in India need to use their mind and think logically before disregarding any steps taken by the government just because the party that they support do not agree with the government’s step. Instead of not supporting the good steps taken by the government, we need to wake up and stop supporting the wrong political parties!
Written By NEEL PREET – Author of the Books, Voice From The East (2016); Journey With Time Place And Circumstances (2018) & Indian Defence Files (2021).
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