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What is GST or Goods and Services Tax?

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It's so often in the news these days, it's just that you cannot ignore writing about it. GST or the Goods and Services Tax is touted as one of the biggest tax reform initiatives the country would have.

 

The GST is an indirect tax and will replace a host of taxes like excise duty, service tax and value-added tax (VAT).

 What is GST or Goods and Services Tax?

The GST would be a comprehensive mechanism whereby tax on manufacturing and services would be levied at the national level.

The implementation of GST would help avoid taxes and prevent widespread corruption that takes place through different levy of taxes across the centre and states.

According to a report in the Hindustan Times the Implementation of a comprehensive GST would lift India's economy of over $1 trillion by between 0.9 percent and 1.7 percent, on top of whatever growth would otherwise be achieved, according to a report by the New Delhi-based economic think-tank the National Council of Applied Economic Research.

A number of delays have taken place in arriving at a consensus on GST, as state governments have had certain reservations especially regarding revenue sharing.

 

Exports will be exempted and would not fall under the purview of GST. Also, direct taxes, such as income tax, corporate tax and capital gains tax will not be affected.

The GST is to be implemented through a Constitutional Amendment Bill, which means it needs to be approved by not less than two-thirds of the members present and voting in each House of Parliament.

GoodReturns.in

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