GOODS AND SERVICE TAX (GST)

Introduction:

Goods and Service Tax (GST) is a comprehensive tax levy on manufacture, sale and consumption of goods and service at national level. It is a tax with value addition at each stage having comprehensive and continuous benefits from the producer’s/ service provider’s point to the retailer’s level.

Need for GST:

GST is to replace the existing Center and State taxes is not only desirable but imperative in the emerging economic environment. Increasingly, services are used in production and distribution of goods. Separate taxation of goods and services often requires splitting of transaction values into value of goods and services for taxation, which leads to greater complexities, administration and compliance costs. Integration of various taxes into a GST system would make it possible to give full credit for inputs taxes collected. GST, being a destination-based consumption tax based on VAT principle, would also greatly help in removing economic distortions and will help in development of a common national market.

Model of GST:

There are two models in GST was proposed by empowered committee and accepted by center which are follow:

• Central GST
• State GST

Central GST is applicable for central government and under its control.

Sate GST is access and control by state government.

Conclusion:

Thus GST provides lots of benefits which are follow:

• GST structure would be simple and transparent tax structure.
• Reduction in the number of taxes at the Central and state levels.
• Cut in effective tax rate for many goods.
• Removal of the current cascading effect of taxes.
• Increased tax collections due to wider tax base and better compliance.

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