What is GST? It is the Goods and Services Tax, the biggest tax reforms in India in last 70 years which has simplified the mighty and complicated Indian tax system. The national leaders claim that it is one of the bold moves of Indian government ever taken for the betterment of the financial health of the country.
GST to end the vicious cycle of tax fraud and corruption
When nations leaders determined to end the vicious cycle of tax fraud and mismanagement, when they determined to get rid of the “the rich get richer and poor get poorer” phenomena, GST council was formed and GST bill was framed and passed in both of the houses.
Central government claims to unify all the taxes which are levied throughout the country. The government claims that it is firm step to eradicate inflation and bring economic growth in Indian economy.
Let’s find out how this tax system simplifies the tax system of India. This bill has four categories, 5%, 12%, 18% and 28% of the tax slab. The tax is levied on the bases of these four categories.
The 5% slab: it is prime purpose of this bill to eradicating inflation. This 5% tax slab is levied upon grain and food. GST has rightly targeted grain and food. The portion of taxation and has cut out the taxes levied upon grain and food.
To curb the inflation, GST prescribed the 5% tax upon the products of common use, in comparison to the earlier 9% of the tax.
The 12% and 18% slab: This slab has two standard rates. The tax is levied on the bulk items such as processed products, soaps, oils etc. There are further categories of the commodity in this slab.
The 28% slab: The state is responsible for the equality of the citizens and for providing the economic equality along with political equality. GST offers sever tax on the luxury goods. This 28% slab is applicable to luxury and white goods. The tobacco and aerated drinks etc come under this category.
Taxes for precious metal – There is another rate slab which is of gold and other precious metals. 3% tax is set to apply for the gold and there would be 8% making charges along with it.
Confusion and corruption in tax system have ended
- If we analyze the above tax system and the aftermath of GST, it is evident that it has eradicated confusion and has simplified the tax system.
- The earlier confusing and multi-level tax system which fostered corruption and hardship for the common man has ended and this new tax has given the robustness to the Indian economy.
Some say that we won independence in 1947 when we expelled brutal English and their law, but the real economic independence is won now by repelling the grim, corrupt, sluggish old tax system by the lucid and robust GST. Certainly, this tax system is in favor of health of our nation.