GST stands for Goods and services Tax and currently it has been implemented in India on July 1, 2017. GST- an introduction and classification.With this India has become 161st country to implement the GST structure. GST was first proposed in the year 2000 and after this several attempts have been made by government from time to time but due to opposition and other factors the GST could not be implemented but now it has been implement. So let us see some basic structure of GST and how it will work.
GST- an introduction and classification
Earlier there were various kinds of taxes in Indian economy which are called indirect taxes. These taxes are levied by state government sand central government both. For example, central government levy taxes like service tax, VAT, custom duty etc and state government levy taxes like entertainment tax, luxury tax and others on the same items/ commodities. Due to this the India Tax structure becomes cascading in nature. To remove this tax structure and difficulties in its implementation, a simple and more easier form of GST has been implemented by the government now. It may have good impact on Indian economy but it may only be said certainly after it has been implemented successfully.
Legal aspect of GST
How GST came into existence? This has been done through amendment in current law/ article. Detail is as under:
- On 29th March 2017, the Finance Minister of India presented four Goods and Services Tax (GST) Bills, for passage in the LokSabha.
- The Central Goods and Services Tax (CGST) Bill, 2017 The Integrated Goods and Services Tax (IGST) Bill, 2017 The Union Territories Goods and Services Tax (UTGST) Bill, 2017 GST (Compensation to States) Bill, 2017.
- They were passed by the LokSabha on 29th March, 2017 and by the RajyaSabha on 6th April, 2017.
Terms used in GST
Central GST. It will be used by central government o levy taxes on the commodities. The taxes will go to the central government.
It stands for state goods and services tax. The tax collected will go to the state.
Integrated GST. The tax collected through this will go to the central government.
Structure of GST:
India has acquired structure of GST where the GST will have slabs based on the type of commodities. For services the GST is 18%. So there are 4 slabs of GST which are 5%, 12%, 18% and 28%. In this respect, India has the highest rate of GST in the world the second highest being Argentina with 27%.
It stands for goods and services tax network. It will be a common portal and platform for all those who are under GST. Business and entities can register their GST registration, pay taxes and file return through the network.
GST will have positive and negative impact on the economy and all those who are preparing for the banking examinations and others must know these details which will be beneficial for them in the examination.