The Goods & Service Tax or GST come with one of the greatest economic reforms in India since Independence. Undoubtedly, it is an indirect tax introduced in India on 1 July 2017 was applicable throughout India. This is basically introduced for replacing the multiple cascading taxes imposed by the central and state governments.
GST Council and its Chairman governed the GST laws.
GST Slab Rates for Different Goods:
- 5% Rate: Items of mass consumption comprises of essential commodities will have low tax incidence.
- 12% and 18 % Rate: After the GST implications, two standard rates have been finalised as 12% and 18%.
- 28% Rate : Some of the goods including Air conditioners, washing machines, refrigerators, soaps and shampoos etc. previously were taxed at 30-31% shall be now taxed at 28%.
- Zero rated items: Food grains used by common people.
There are certain products like tobacco, tobacco products, pan masala, aerated drinks and luxury cars whose will charged at the highest rate of 28%. An additional cess on some luxury goods shall also be imposed.
GST come with benefits of:
- GST is considered as a simplified tax policywhen compared with previous tax structure. As per the GST process – starting from registration to filing returns till payment of GST tax, the procedure is now going to be online. If you are starting a new business, then you do not have to run around the tax offices to get various registrations under excise, VAT, service tax.
- GSTor Goods & Services tax effectively eliminates the cascading effect of taxes that includes removal of tax. According to GST, the input tax credit can easily be available smoothly across the spectrum of goods and services. Thereof, minimizing the tax burden on the end user and removing cascading effect.
- Because of the lowering burden of taxes on the manufacturing sector, the overall manufacturing costs will be reduced down and the prices of consumer goods would likely to come down.
- This bold step will definitely help in lowering the burden and shed less money to buy the same products which were earlier expensive.
- The low prices will further lead to an increase in the demand/consumptionof goods.
- Whereas, the increased demand will lead to boost up supply. Hence, this will ultimately lead to rise in the production of goods.
- It has limited the circulation of black money.
- It comes with Composition scheme for all kinds of small businesses.
- Go for simple and easy online procedure.
- The number of compliances is lesser.
- Defined treatment for E-commerce operators.
- Improved efficiency of logistics.
- Unorganized sector is regulated under GST
- Higher threshold for registration.
With the time GST has now become a global standard that ensures indirect tax rates and structures are common across India. The main aim of GST is to increase the taxpayer base by bringing SMEs and the unorganized sector both under its purview. No doubt the introduction of this unified tax structure helps in making the Indian market more competitive than before and create a level playing field between large & small enterprises.