How Can A Common Man Understand The Indian Gst?

By Author: Mohit Yadev
Total Articles: 74
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The Constitution of India divides the subjects matters into three lists.
1. Centre List: Only Centre Government can make law or levy tax
2. State List: Only State governments can make law or levy taxes
3. Concurrent List: Both Centre and state government can make law and levy taxes
Financial Powers of Centre and State Governments are decided accordingly.
Centre has the powers to levy tax on the manufacture of goods (except alcoholic liquor for human consumption, opium, narcotics etc.) called excise duty
Centre alone can levy duty on import and export of goods i.e. Customs Duty. Additional Customs Duty is levied by the Central government to offset the local taxes mainly excise duty.
Centre government alone is empowered to levy service tax.
States have the powers to levy tax on sale of goods within the state and many other taxes like octorai, entertainment tax etc.
In case of inter-State sales, the Centre has the power to levy a tax (the Central Sales Tax) but, the tax is collected and retained entirely by the originating States.

GST was implemented after the amendment ...
... in Constitution. Accordingly GST was brought to the concurrent list so that all center and state governments are empowered to levy and collect the GST.
GST consumes several taxes into one as shown in the figure below.
Figure 1: The taxes consumed under GST
GST is a destination based tax where the tax is collected at the point of consumption and goes to the state where it is consumed rather than where it is produced.
The greatest benefit of GST is that now there will be one tax for the entire country and India would thus become a single market.
GST Provides several benefits to the trade as well as to the consumers, which are listed as following.
Benefits to Citizens:
(i) Simpler tax system
(ii) Reduction in prices of goods and services due to elimination of cascading
(iii) Uniform prices throughout the country
(iv) Transparency in taxation system
(v) Increase in employment opportunities
Benefits to Trade/Industry:
(i) Reduction in multiplicity of taxes
(ii) Mitigation of cascading/double taxation
(iii) More efficient neutralization of taxes especially for exports
(iv) Development of common national market
(v) Simpler tax regime-fewer rates and exemptions
Benefits to Central/State Governments:
(i) A unified common national market to boost Foreign Investment and “Make in India” campaign
(ii) Boost to export/manufacturing activity, generation of more employment, leading to reduced poverty and increased GDP growth
(iii) Improving the overall investment climate in the country which will benefit the development of states
(iv) Uniform SGST and IGST rates to reduce the incentive for tax evasion
(v) Reduction in compliance costs as no requirement of multiple record keeping
Know More GST Return In India.