Daily News Analysis

GST

3rd May, 2021 Economy

GS PAPER III: Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment.

Context: In view of the corona pandemic, the government has announced various relief measures for taxpayers under GST law including reduction in interest rate and waiving of late fee.

What is GST in India?

  • GST is known as the Goods and Services Tax.
  • It is an indirect tax, which has replaced many indirect taxes in India such as the excise duty, VAT, services tax, etc.
  • The Goods and Service Tax Act was passed in the Parliament on 29th March 2017 and came into effect on 1st July 2017.
  • 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.
  • Under the GST regime, the tax is levied at every point of sale. In the case of intra-state sales, Central GST and State GST are charged. All the inter-state sales are chargeable to the Integrated GST.

Advantages Of GST

  • GST has mainly removed the cascading effect on the sale of goods and services. Removal of the cascading effect has impacted the cost of goods.
  • Since the GST regime eliminates the tax on tax, the cost of goods decreases.
  • Also, GST is mainly technologically driven.
  • All the activities like registration, return filing, application for refund and response to notice needs to be done online on the GST portal, which accelerates the processes.

 What are the components of GST?

There are three taxes applicable under this system: CGST, SGST & IGST.

CGST: It is the tax collected by the Central Government on an intra-state sale (e.g., a transaction happening within Maharashtra)

SGST: It is the tax collected by the state government on an intra-state sale (e.g., a transaction happening within Maharashtra)

IGST: It is a tax collected by the Central Government for an inter-state sale (e.g., Maharashtra to Tamil Nadu)

http://newsonair.com/News?title=Govt-announces-various-relief-measures-for-taxpayers-under-GST-law&id=415701