GOODS AND SERVICES TAX (GST)

The introduction of the GST affords the country an opportunity to embrace a modern consumption tax with appropriate focus on fostering efficiency, reduced cost of compliance and ease of administration together with the real prospects of enhanced tax revenue (Ficci). If the value added tax (VAT) is considered to be a major improvement over the pre-existing central excise duty at the national level and sales tax system at the state level, then the Goods and Services Tax (GST) will be a further significant break thought-the next logical step towards a comprehensive indirect tax reform in the country. GST is the comprehensive indirect tax levy on manufacture, sale, supply and consumption of goods and services. Its main objective is converge of all indirect taxes into a single tax , replacing multiple tax levies , overcoming limitations of current indirect tax structure and creating efficiencies in tax administration.  In India currently we are having Service Tax and VAT for collection of indirect tax on central level and VAT is charged for sale of goods on state level. But current tax system is not able to minimize tax evasion, distortion and cascading effects and also not able to increase the competitiveness of industry, export and company therefore we want move to GST. Goods and Services Tax would be one of the most significant fiscal reforms of independent India .GST is expected to result in major rationalization and simplification of the consumption tax structure at both centre and state levels. This paper presents the concept, recent developments and proposed benefits of GST to the India.

 

Keywords: Goods and Services Tax (GST), Value Added Tax (VAT), tax evasion, cascading effects and fiscal reforms.

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