Top 5 reasons why GST should be implemented in India

Everything about GST in India

India's two of the major problems are tax evasion and corruption. So, to come out of these problems a big step has to be taken by the government which is in the form of GST. India's tax system is more complex and GST will help in the simplification of tax system in our country and help in the reduction of tax evasion.

GST will be India's biggest tax reform since independence (1947). The current indirect tax structure is full of uncertainties  due to multiple rates and due to multiple rates there are multiple forms and intern cumbersome compliances. This will improve tax compliance so with the introduction of GST transparency in taxation would increase and lead to reduced tax evasion.

What is GST?

The first question which arrives in our mind. GST is the consumption based tax which is levied when a consumer buy goods  or service and tax which would be replaced by GST.

GST is a single umbrella tax hence the taxes which will be subsumed by the GST :

 

Tax imposed by the union:

1. Central excise duty

2. Additional excise duty

3. Service tax

4.

Additional duty on tax.

 

Tax imposed by the state:

1. VAT\sales tax

2. Octroi and entry tax

3. Purchase tax

4. State cesses

Why do we need  GST?

The purpose of  introducing GST is  because current indirect taxation structure of India is full of uncertainties due to multiple rates where multiple rates we mean by is,  such as, at state level  we have VAT (Value Added Tax), at center level we have ST (Sales Tax), CD (Custom  Duty) , ED (Excise Duty) and  many more where all these taxes carry different rates and the more the number of rates, more the number of forms which make it more cumbersome so all these taxes will be abolished and only one tax system will be introduced which is GST because it will rule out the problem of multiplicity of rates.

GST council

It has been proposed that would comprise of:

1. Union Finance Minister (Chairman)

2. Union minister of state in charge of revenue or finance

3. Minister in charge of Finance or Taxation

4. Any other minister nominated by each state govt. would constitute the council.

Objective of GST council:

•  Which center /state tax would go into GST

• Which goods or services are subject to GST

• Rates/basis on which GST will be decided

• Voting strength: 1/3 vote of central government and 2/3 vote of state government (any decision need 75% of majority).

So, GST at a single and and unified rate is an efficient solution as it simplifies the indirect tax structure to one general rate that can be paid by every person/company where all the key desicions are in the hands of GST council with representatives from center and state in place, states would have a say in the implementation of the tax laws in their territories. Hence, GST is good and sysmetic action which is for the wellbeing of the country. 


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Awesome work #ankitkumar. Keep it up

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