What is GST in India ?
In March 29, 2017 the Indian government declared the Goods and Service Tax to unify the state economies and enhance the overall economic growth of the country. Act according to which the GST is an indirect tax that subsumes all other taxes. This Act became effective on July 1 2017 and since then GST has replaced all the taxes that were existed previously. GST is a comprehensive tax that is imposed at every stage of sale.
How the GST system works in India
GST is a comprehensive, value-added tax imposed on manufacture, sale and consumption of goods and services. GST is a single unified system that is applied across the country.
How GST Will Transform India
As GST removes the cascading effect of taxes and the economic barriers between the states, it will be beneficial for businesses and consumers. For instance, if a product has a tax rate of 20%, this is inclusive of central and state government’s taxes. The seller can manufacture in one state and supply to other states with no taxes. Also, the consumers would be subject to only this indirect tax and no other taxes. GST helps government in creating a common market with common procedures, thereby reducing the corruption.
Goods and Services tax council
Why Do We Need A GST Council?
The GST Council in India is a governing body that regulates the GST act and all its further amendments. The Council takes the key decisions related to GST, which includes changes in tax rates, tax laws, tax deadlines, etc. The GST Council regularly notifies the finance ministry of all the improvisations. One of the primary responsibilities is to ensure that there is one uniform tax across India.
How Is The GST Council Structured?
According to the Article 279A (1), GST council has to constituted by the President within 60 days of the commencement of the Article 279A. It also states Creation of GST Council Secretariat, Appointment of the Secretary, Inclusion of the Chairperson and an Additional Secretary and four Commissioners in the GST Council Secretariat.
GST Download
Every business that has an annual turnover of more than Rs 20 lakh has to mandatorily register for GST. Other businesses which fall under “special” category are also required to register for GST. Once registered, the GST taxpayer will get a GST registration certificate in Form GST REG-06, which can be downloaded from the GST portal. It has to be noted that the government does not issue physical certificate.
GST notification & circulars
Regular notifications and circulars on GST orders are provided to people. Orders, that are related to compliance, which need immediate attention are issued. The orders and circulars of 2018 are:
- - Integrated tax circulars
- - Central tax orders
- - Integrated tax circulars
Which countries collect GST?
The Goods and Services tax was first introduced in France in the year 1954. Other countries that followed suite are Singapore, UK, New Zealand, Malaysia, Canada, etc. Also, many countries had protests and compliance burdens for short terms. The GST concept is the same all around the world and only the rate differs. In the case of Canada, it is a dual GST similar to India and the standard rate ranges from 13-15%.
India's adoption of GST
India decided to join the other leading countries which have successfully implemented GST. Hence, one of the significant Indian tax reforms, GST is regarded as a “one tax, one nation” that subsumes all indirect taxes. GST facilitates global competitiveness among businesses, simplifies tax collection process, reduces corruption across the nation and make interstate selling of goods easy. The dual GST set up came into force on July 2017, abolishing the complex tax structures that were existing for decades. The main idea of GST was to eliminate the cascading effect of taxes, i.e., tax on tax or double taxes right from manufacturing phase till it reaches the consumer.
