Ever since the Government of India announced that it was going to introduce the GST Bill and revolutionize the tax system of the country, the people of India (especially the business community) were concerned as to the ways it was going to impact their revenue. The whole purpose of the GST Bill is to make the process of taxpaying a lot simpler. However, there is still a lot of confusion about the way GST works in India. The Lok Sabha passed 4 very important GST Bills on 29th March, 2017 which in turn provided with the scope of implementing the GST by 1st July, 2017. Economists and trade experts strongly believe that GST has the potential to bring positive change to the tax system in India.
The four types of GST Bills that got approved to be implemented in India are CGST Bill or Central Goods and Services Tax Bill, Integrated GST Bill Compensation GST Bill as well as Union Territory GST Bill. While at one point of time India had multiple taxes which were implemented on several levels, GST was envisioned to unify all such taxes into a single entity. This makes it easier for the government to collect taxes but also maintains complete transparency for the tax payers so that they know what tax amounts they are supposed to pay at different stages.
Earlier there were multiple types of indirect taxes; with GST it has been possible to streamline all kinds of taxes within a single system. For instance, Central Excise Duty, Service Tax, Additional Duties of Excise and Customs, Special Additional Duty of Customs as well as other surcharges have been replaced by the Central Taxes GST. The VAT Entry Tax, Entertainment Tax, Purchase Tax, taxes on lotteries, betting and state surcharges have been replaced by the State Taxes GST. Finance Minister of India Mr. Arun Jaitley believes that GST is going to have a major impact in bringing down excessive inflation. The products and services associated with electronics and the beauty industry implements a wide range of taxes based on the current state of the consumer. However, with the proper implementation of GST such ambiguities can be removed permanently.
The taxes that have been traditionally operative in India also led to substantial taxation on various individuals. However, with the application of GST such issues can be rectified with immediate effect. Up until now, the Centre and the State levied and calculated taxes based on the layers of tax that are already being levied on the same service or product. Such a taxing procedure can have a negative impact on the Gross Domestic Product or GDP of the nation. Ideally, taxes should always be levied on original pricing of a product or service. GST can also minimize tax evasion and it can also simplify business operations.