HOW GST (GOODS AND SERVICE TAX) WAS IMPLEMENTED IN INDIA?
After a decade long struggle, Goods and Services Tax (GST) has finally been carried out in federal India from 1st July 2017. The implementation of GST has led to the elimination of the cascading impact of taxes in the economic system and also led to the promotion of free movement of goods crosswise the States, thereby creating “one nation, one market”. A simplified tax regime has resulted in less compliance burden for taxpayers and promotes simplicity in doing business within the country. This blog highlights a short analysis of GST which would carry a substantial change in the purview of indirect tax in India. Basically, it is known as the mother of indirect tax as it will link most of the indirect tax leading to a lucid ambiance for the taxpayer to address with it. Although it is the modern version of VAT. It has put an end to the complex and cascading nature of the multiple-tier indirect taxation. GST is officially called as 101st amendment Act, 2016 which was introduced as GST (Goods and Services tax) in our country. There were three attempts in order to reform the indirect tax by the committee for implementation of GST:
The 1st attempt of reform under the chairmanship of JOHN MATHEW in 1953 where he suggested that sale tax should be levied by the State Government as a source of revenue with the intervention of the UnionGovernment only in case of inter-state sale transaction at the rate of 1%.
The 2nd attempt of reform was taken in 1976, the inquiry commission under the chairmanship of L.K JHA where he had given some recommendations for modification of VAT with respect to the input tax credit mechanism at the manufacturing level.
The 3rd attempt was at the time of Mr. Manmohan Singh’s government and it introduced the LPG (Liberalization, Privatization, and Globalization) no description of the same for the betterment of economy in 1991; the indirect reform was done under the chairmanship of Professor RAJA J.CHELLIAH committee whereas he suggested that we should increase the tax rate while wasting of services and extension of modified VAT. (not making sense)
IN 1995, the VAJPAYEE government headed by the Union Finance Minister had a meeting with state CM (Mr.Asim Dasgupta) creating a standing committee in Nov 1999 to deliberate the design of the GST model and the Dasgupta Committee had introduced the back–end technology and logistics (which is known as GST NETWORK or GSTN in 2015 ). GST is a destination-based indirect tax collected by central as well as state government after the consumption of the final goods and services by consumer then GST has to be paid by any consumer.
In Union budget 2020 which was presented on 1st February 2020 by union Finance Minister SMT. NIRMALA SITHARAMAN. In her speech, she called Mr. Arun Jaitley was the architect of GST. According to this budget, there were many changes in the GST procedure, and in the end the fake invoicing memos. These legislative changes of GST which were recommended by the GST council will be introduced in Finance Bill, 2020 (later on known as Finance Act, 2020). A tax system that is regressive in nature will harm the poor and also is the opposite of a progressive tax system.
GST is the most logical step towards the comprehensive indirect tax reforms in our country since independence. Basically GST is a single, unified Indian indirect tax that is applied on different stages of supply, production, distributions, etc. The most important thing is that it has divided the taxation burden amongst manufacturers and services. It has also boosted up the growth of our economy
Dutta, Prabhash K. “GST: Meet the Men behind India's Biggest Tax Reform That's Been in Making for 17 Years.” India Today, 29 June 2017, www.indiatoday.in/India/story/goods-and-services-gst-reformers-atal-bihari-asim-dasgupta-chidambaram-arun-jaitley-985352-2017-06-29.
Kumar, N, 2014, Goods and Service Tax in India: A way forward. Global Journal of Multidisciplinary Studies, 216-225
Goods and Services Tax Council,2017 (http://www.gstcouncil.gov.in)
Nair, Remya. "Stage Set For GST Rollout On 1 July". Livemint, 2020, https://www.livemint.com/Politics/7KHC3cniR8mjzof3fcydSK/GST-rollout-deferred-to-1-July-Arun-Jaitley.html.
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Ritul Tyagi is a 4th-year law student currently pursuing Law from Galgotias University.
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