Know All about GST And Its Features
The Goods and Services Tax or GST is a main indirect tax reform launched in India by consolidating the main indirect taxes of the Center and the states. GST is launched in India to bring a unified market across the entire country.
Members of Congress completely boycotted the GST launch. The parties stated that they found almost no difference between the GST and the existing VAT taxation system, claiming that the government was only trying to recreate the current taxation system. He also argued that GST would increase the prevailing rates of common daily commodities. Lowering rates on luxury goods, and contrarily affect many Indians, especially the middle, lower-middle and poor income groups
What is GST?
GST is a tax that the manufacturer/trader/service provider has to spend on the number of goods and services and the consumer is required the same.
Features of GST
GST refers to the VAT family as tax revenue is received on value-added support. In the matter of a true commodity-based VAT policy, GST also involves service tax. Similarly, information assets are provided when determining tax responsibility. The Features of GST are as follow:
GST is a consumption-based tax
If we can examine goods or services as one horse, then GST is a horse rider. Wherever the horse moves, the rider walks along. GST has imposed a consumption-based tax because in that case goods or services are actually consumed.
GST is a consumption-based tax which is a reasonable approach. Under the current situation, a tax is owing in the state where the goods are manufactured. For example, if the goods are sold from Gujarat to Rajasthan, the tax will be paid to the Gujarat government. This is basic-based taxation. Under this principle, a consuming state is not receiving any tax revenue which is the tax base erosion of that particular state. This difficulty is determined under the proposed GST administration.
Since GST is a consumption-based tax, the tax revenue will be levied and collected by the consuming state, and this helps the consuming state to protect its tax base.
Similar things were done by the Central Government by amending Section 9 several times under the Income Tax Act, 1961 to save the tax base.
According to the model GST law and various recommendations, a dual GST model is proposed; Central GST and State GST. Both will apply to goods and services within the state. The input tax credits (ITC) of CGST and SGST will not be possible against each other.
CGST and SGST will not be applicable in case of the interstate supply of goods or services.
Integrated GST or IGST will be required only on the interstate supply of goods and services. IGST will also utilize the import of goods or services in India. IGST rate will be equal to CGST and SGST combined rates.
GST applicability in India
GST is applicable to the supply of all goods or services or both except taxes on the supply of alcoholic liquor for human consumption. Under the current policy, alcoholic liquor will remain to be taxed for human consumption.
GST is currently not applicable to alcoholic liquids for men using and petroleum crude, motor spirit (petrol), high-speed diesel, natural gas, and aviation turbine fuel (GST Council will decide when these will be brought under the purview of GST ). GST will also be applicable to tobacco and tobacco products. Further, the Center may also levy excise duty on tobacco and tobacco products.
The single market single law
GST is an indirect tax for the whole country. Under the current structure, there are 31 different VAT laws in the country. Each has a separate registration process, return filing procedure, penal provisions, etc. This creates difficulty for the businessman to run the business smoothly.
Under the GST administration, there will be unity across the country. GST will easily provide a major success in doing business in India.
Taxes paid under GST
Currently, different indirect tax laws are functioning differently yet are not achieving the desired satisfaction. So many taxes create non-compliance, tax evasion and at the same time, it is difficult for government officials to administer. GST is set to succeed in this multiplicity of taxes.
Members of Congress completely boycotted the GST launch. The parties stated that they found almost no difference between the GST and the existing taxation system, claiming that the government was only trying to recreate the current taxation system. He also argued that the GST rate would increase the prevailing rates of common daily commodities. Lowering rates on luxury goods, and contrarily affect many Indians, especially the middle, lower-middle and poor income groups