GST
No Comments
Subject: Economy
Context:
The Goods and Service Tax (GST) regime completes three years since it was first introduced on July 1, 2017
Concept:
- The GST aims to streamline the taxation structure in the country and replace a gamut of indirect taxes with a singular GST to simplify the taxation procedure.
- It has been established by the 101st Constitutional Amendment Act.
- It is an indirect tax for the whole country on the lines of “One Nation One Tax” to make India a unified market.
- Taxes like excise duty, VAT, service tax, luxury tax will go with GST’s implementation.
- GST is essentially a consumption tax and is levied at the final consumption point. The principle used in GST taxation is Destination Principle.
- It is levied on the value addition and provides set offs. As a result, it avoids the cascading effect or tax on tax which increases the tax burden on the end consumer.
- There is a provision of GST Council to decide upon any matter related to GST whose chairman in the finance minister of India. It will approve all decision related to taxation in the country. It consists of Centre, states and UTs with legislature. Centre has 1/3rd voting rights and states have 2/3rd voting rights. Decisions are taken after a majority in the council.
- GSTN is registered as a not-for-profit companyunder the companies Act. It has been formed to set up and operate the information technology backbone of the GST. While the Central (24.5%) and the state (24.5%) governments hold a combined stake of 49%, the remaining 51% stake is divided among five financial institutions
