All you need to know about Goods and Service Tax (GST)

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Introduction to Goods and Service Tax

By the word GST, we mean Goods and Service Tax. These are the taxes which are levied by the Central and State Government on the customers who buy goods and services.

Goods and Service TaxThis tax is mainly an individual tax and has to pay by an individual only. This tax is applicable for the whole country. There are many more taxes which are levied by the Central and State Government on goods and services. Let us briefly talk about Goods and Service Tax.

What does it Mean?

As we already know the full form of GST which is Goods and Service Tax. It is an indirect tax which is levied on the customers when they buy goods and services by the Central and State Government. before the launch of GST there were many taxes which have been levied on the customers and in order to remove all those taxes a new tax named GST introduced which is a great step by the Government.GST was first introduced during 2007-08. On 17th December 2014, the current Union Cabinet ministry approved the proposal for introduction of GST Constitutional Amendment Bill. On 19th of December 2014, the bill was presented on GST in Loksabha. The bill will be tabled and taken up for discussion during the coming Budget session. The current central government is very determined to implement GST Constitutional Amendment Bill.

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GST was first introduced during 2007-08. On 17th December 2014, the current Union Cabinet ministry approved the proposal for introduction of GST Constitutional Amendment Bill. On 19th of December 2014, the bill was presented on GST in Loksabha. The bill will be tabled and taken up for discussion during the coming Budget session. The current central government is very determined to implement GST Constitutional Amendment Bill.

Thus GST is a tax that we need to pay on the supply of goods and services. Any person who is providing or supplying goods and services is liable to charge GST.

Why is it made?

The main reason behind the launch of this system is to abolish all the indirect taxes that were levied on the consumers by the Central and State Government.

GST rate applicable

The rate of GST is not decided yet but it is widely believed that there will be 2 or 3 rates based on the importance of goods. The rates of good which are precious must have higher rates than the goods which are lower for essential goods.

Also See: What’s Better – Job or Business?.

Benefits of Goods and Service Tax (GST)

1. This type of tax structure is very simple.

2. This type of tax is good for export-oriented business activities as it is not applicable on goods and services exported out of India.

3. It will help in lowering the prices of goods by lowering the tax burden.

4. It will reduce the different types of tax departments which in turn reduces corruption.

GST is doing good in its field but it has to face many challenges too. Below are the various challenges that GST is facing:

1. This bill is not yet passed in the Parliament.

2. In order to pass this bill many changes has to be made in different departments like administration, IT etc.

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