What is the gst and what is the significance of such a tax

But GST was almost two decades in the making since the concept was first proposed under the Atal Bihari Vajpayee government. The development of GST took many consultations, negotiations and revisions before it was launched in its final form in The launch of GST was also made difficult by the fact that it required a Constitutional Amendment, and hence, a two-thirds majority approval in the Parliament, and a nod of more than at least half of the states.

GST allowed for faster movement of trucks and led to requirements for fewer warehouses across several states. However, GST has multiple tax rate slabs for different categories of products — a fact that still makes it more complicated than many expected. What are the different types of GST? What items are not taxed or covered under GST? GST Rates Slabs 7. Calculating GST 8. GST Return Filing New Compliances under GST. A task force.

Kelkar, concluded that GST could help improve the tax structure in India. Subsequently, GST came into force on 1st July Upon implantation, the GST replaced the following central taxes:. Note that taxpayers who have an annual turnover of up to Rs. This cut off is set at Rs.

The GST law also extended the option of choosing a compounding scheme and threshold exemption. Notably, gaining an insight into the objectives of this tax regime helps to understand GST meaning better. For instance, the primary objectives of the GST service tax include —.

Collateral-free Business Loans up to Rs. Submit only 2 documents and get funding in just 24 hours- Apply Now. The introduction of GST is touted as one of the biggest tax reforms in India. In this regard, the most prominent advantages of GST include:. As per the GST regime, all businesses liable to pay service tax, VAT, or central excise have to register under goods and service taxes by following the process of GST registration online.

Once the application is submitted, the online portal will generate ARN status instantly. Applicants can also post queries if needed. Submit these GST registration documents to complete the process — A. Documents required to complete registration of GST online: Sole proprietor or individual. Documents required to complete registration of goods and services tax: Company both Indian and foreign, public and private. It is important to note that the government does not levy GST registration fees if an individual decides to register through the online GST service tax portal.

It must be noted that you will require the credentials for GST login , such as username and password, and follow a few steps to access such details from the GST portal. It is an indirect tax which has replaced many indirect taxes in India such as the excise duty, VAT, services tax, etc. Goods and Services Tax Law in India is a comprehensive, multi-stage, destination-based tax that is levied on every value addition.

GST is a single domestic indirect tax law for the entire country. Before the Goods and Services Tax could be introduced, the structure of indirect tax levy in India was as follows:. Under the GST regime, the tax is levied at every point of sale. All the inter-state sales are chargeable to the Integrated GST. Now, let us understand the definition of Goods and Service Tax, as mentioned above, in detail.

An item goes through multiple change-of-hands along its supply chain: Starting from manufacture until the final sale to the consumer. The Goods and Services Tax is levied on each of these stages making it a multi-stage tax. A manufacturer who makes biscuits buys flour, sugar and other material. The value of the inputs increases when the sugar and flour are mixed and baked into biscuits. The manufacturer then sells these biscuits to the warehousing agent who packs large quantities of biscuits in cartons and labels it.

This is another addition of value to the biscuits. After this, the warehousing agent sells it to the retailer. The retailer packages the biscuits in smaller quantities and invests in the marketing of the biscuits, thus increasing its value.

GST is levied on these value additions, i. Consider goods manufactured in Maharashtra and sold to the final consumer in Karnataka. Since the Goods and Service Tax is levied at the point of consumption, the entire tax revenue will go to Karnataka and not Maharashtra. The GST journey began in the year when a committee was set up to draft law.

It took 17 years from then for the Law to evolve. GST has replaced multiple indirect taxes, which were existing under the previous tax regime. The advantage of having one single tax means every state follows the same rate for a particular product or service.

Tax administration is easier with the Central Government deciding the rates and policies. Common laws can be introduced, such as e-way bills for goods transport and e-invoicing for transaction reporting. Tax compliance is also better as taxpayers are not bogged down with multiple return forms and deadlines. Some taxes were governed by the states and some by the Centre.

There was no unified and centralised tax on both goods and services. Hence, GST was introduced. Under GST, all the major indirect taxes were subsumed into one. It has greatly reduced the compliance burden on taxpayers and eased tax administration for the government. One of the primary objectives of GST was to remove the cascading effect of taxes.

The Bill with certain amendments was finally passed in the Rajya Sabha and thereafter by the Lok Sabha in August, Further, the Bill has been ratified by the required number of States and has since received the assent of the President on 8th September, and has been enacted as the st Constitution Amendment Act, The GST Council has also been notified w. GST Council is being assisted by a Secretariat. Decision in GSTC are taken by a majority of not less than three-fourth of weighted votes cast.

Centre has one-third weightage of the total votes cast and all the states taken together have two-third of weightage of the total votes cast. All decisions taken by the GST Council has been arrived at through consensus. The option of exercising a vote has not been resorted to till date. To ensure smooth roll-out of the GST, various Committees and Sectoral groups has been formed comprising of members from both Centre and States. It will provide front end services and will also develop back end IT modules for States who opted for the same.