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"The Goods and Services Tax" G.S.TBack to Home

"The Goods and Services Tax" broadly known as GST is a subject of discussions across India in the recent time. There are conceptions and misconceptions about the same.

The world history traces out GST Law in France in the year 1954 where it was first implemented and ever since then almost 159 other countries have adopted GST Law. In India the issue on GST was first brought to the table by the then Prime Minister Sh. Atal Bihari Vajpayee in the year 2000.

The very idea behind having one consolidated indirect tax system instead of multiple indirect taxes system is to benefit the Indian economy which will further help the country's businesses gain a different level altogether. The Goods and Services Tax Law aims at removing indirect taxation regime, including those of State and Central level taxes.

Positive Aspects of GST:-

  1. GST is a transparent tax and has reduced number of indirect taxes.
  2. GST reduces cost to registered retailers therefore there will be no hidden taxes and the cost of business will be lower.
  3. G.S.T is benefitting people as prices have come down which in turn will help companies as consumption will increase.
  4. Separate taxes for goods and services previously requires division of transaction values into value of goods and services for taxation, which led to greater complications.
  5. Integrated taxation system of GST has helped split the burden equitably between manufacturing and services.
  6. GST has now been levied only at the final destination of consumption based on VAT principle and not at various points (from manufacturing to retail outlets). It has further helped in removing economic distortions and is bringing about development in the common national market.
  7. GST has helped building a transparent and corruption free tax administration.
  8. GST is backed by the GSTN, which is a fully integrated tax platform to deal with all aspects of GST.

Negative Aspects of GST:-

  1. According to some Economist GST in India has impacted negatively on the real estate market. It has added up to 8 percent to the cost of new homes and has reduced demand by about 12 percent.
  2. According to some Experts CGST (Central GST), SGST (State GST) are nothing but another names for Central Excise/Service Tax, VAT and CST. Thus, there is no major reduction in the number of tax layers.
  3. Some retail products have only four percent tax on them. After GST, garments and clothes has become more expensive.
  4. The aviation industry has been affected. Service taxes on airfares previously ranged between six to nine percent, but With GST, this rate has surpassed fifteen percent and effectively doubled the tax rate.
  5. Adoption of the new GST system has caused teething troubles in various fields.

PRICE DIFFERENCE AFTER IMPLIMENTATION OF G.S.T

The following things/items have become cheaper under GST

  • Prices of movie tickets may become cheaper in most states
  • Dining in restaurants
  • Two-wheelers
  • Entry-level sedan (except small cars)
  • SUVs and luxury or premium cars
  • Televisions
  • Washing machines
  • Stoves

The following things/items have become costlier under GST

  • Mobile bills
  • Renewal premium for life insurance policies
  • Banking and investment management services
  • Basic luxuries for a common man like WIFI and DTH services, online booking of tickets may become costlier.
  • Residential rent
  • Health care
  • School fees
  • Courier services
  • Commuting by metro or rail may become expensive.
  • Aerated drinks
  • Cigarettes and tobacco products.

There are further 3 kinds of applicable taxes within Goods and Service Taxes; they are CGST, SGST & IGST. Which are explained below:-

CGST: where the revenue will be collected by the central government
SGST: where the revenue will be collected by the state governments for intra-state sales
IGST: where the revenue will be collected by the central government for inter-state sales.

Thus to conclude, Goods & Services Tax Law in India is a comprehensive, multi-stage, destination-based tax that will be levied on every value addition. To put it in simple words GST is an indirect tax levied on the supply of goods and services. GST Law has replaced many indirect tax laws that previously existed in India. Previously, the Indian tax structure was divided into two - Direct and Indirect Taxes. Direct Taxes are levies where the liability cannot be passed on to someone else where as Income Tax is where you earn the income and you alone are liable to pay the tax on it, in Indirect Taxes, the liability of the tax can be passed on to someone else.

"Change is the only constant" there can be endless debate on the advantages about GST. There are mixed reaction to the implementation of the new Law however if seen over all it has definitely brought remarkable change in the Indian Economic System and will prove to be the best in keeping India at power with the other Foreign Nations.

By-
Km. Ranjana Bharti
Assistant Professor
Innovative Institute of Law
Recognised by Bar Council of India New Delhi
Affiliated to CCU Meerut
Greater Noida
Ch.Charan singh Meerut affiliated law college at Greater noida
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