GST, GST GST – Aren’t we all just tired of hearing this term since the last couple of weeks? All the news channels, radio stations, newspapers and social media platforms are flooded with content on GST. Several memes and jokes have been sprint on it and are making the rounds of the internet and while we have been taking a good laugh at them how many of us are actually aware about what GST is all about? Well, looking at the way we have been sharing jokes on the same, seems like we are all aware about the nitty-gritty’s of the same but trust me not many know anything about it apart from the fact that it is something related to tax.
If you have been procrastinating about leaning about GST then here is your chance to know all about this new step by the government. We have simplified the information to help you understand all about GST so that you can flaunt your knowledge on the same the next time your colleagues or friends bring up the topic.
What is GST?
Lets us begin by understanding as to what GST is? GST stands for Goods and Services Tax. It is basically one direct tax for the entire nation. It is a single tax that would be levied on the supply of goods and services unlike the present scenario wherein the manufacturers as well as the consumers are required to pay different kinds of direct and indirect taxes at various stages.
Taxes to be merged into GST
Here are the various taxes at the state level that would be merged in Goods and Services Tax:
- Purchase Tax
- Luxury tax
- State Value Added Tax/Sales Tax
- Taxes on lottery, betting and gambling
- Entertainment Tax (apart from the tax imposed by the local bodies), Central Sales Tax (imposed by the Centre and collected by the States,
- Octroi and Entry tax
Here are the various taxes at the centre level that would be merged in Goods and Services Tax:
- Service Tax
- Additional Excise Duty
- Additional Customs Duty (Countervailing Duty)
- Central Excise Duty
- Special Additional Duty of Customs
Advantages of GST
Here is a look at the various ways in which Goods and Services Tax will benefit the consumers, businesses and government:
- No more Hidden Taxes
The consumers will only be required to give one standard tax and shall not be required to shell out money for any hidden taxes. The system would be more transparent now.
- Lowering of Tax Burden
The tax burden on various commodities is likely to come down due to this all new system which should be a relief for the consumers.
Goods and Services Tax is an attempt to make establishing business tax neutral regardless of the place you are setting up and doing the business. It will make sure that indirect tax rates as well as structures are common throughout the country to promote the ease of doing business.
- No More Cascading
This system of tax credits across the value-chain and beyond the boundaries of states would make sure there is minimal cascading of taxes. This would help in bringing down the hidden costs of doing business.
- Compliance Made Easier
A strong IT system has been put in place for GST. So the tax payers can have all the tax payer services such as registrations, payments, returns, etc online thereby making compliance easier for them.
For the Government
- Ease of Administration
Goods and Services Tax would replace all the indirect taxes at the central and state levels and a strong IT system would be put in place. Thus, it would be easier for the government to administer the taxes.
- Increased Revenue Efficiency
It is expected that Goods and Services Tax will bring down the cost of collection of tax revenues and shall thus result in higher revenue efficiency.
So next time someone talks about GST you will know what exactly they are talking about and participate in the discussion!