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Let's start with the meaning of GST:
Meaning of GST (Goods and services tax)
GST is one of the biggest indirect tax, collected on the supply of goods and services in India. GST upgrade the economic growth of the nation. This tax is an all-inclusive and destination-based tax reforms by the state where the goods are consumed.
It have involved almost all the taxes except the few taxes. In simple words, GST is the indirect tax for the whole country. Due to GST, many indirect taxes had been removed.
GST slabs - The GST council has shaped over 1300 goods and 500 services under four tax slab of 5%, 12%, 18% and 28% under GST. Although electricity, alcoholic drinks, and petroleum products are not taxed under GST.
History and Launch of GST in India
HISTORY -- The idea of GST adoption was firstly suggested by our former president Atal Bihari Vajpayee Government in 2000 to improve the tax structure. In 2004 their government set up a committee to draft GST law, and in 2006 the finance minister proposes GST introduction from 1 April 2010 in 2011 the constitution amendment bill to enable GST law introduced.
In 2012 the discussions begin on GST in standing committee but block it over clause 279B. In 2013 standing committee board make its reports on GST.
Then in 2014 GST bill has been reintroduced by the finance minister in parliament. In 2015 GST bill had passed in Lok sabha but not passed in Rajya sabha. In 2016 GSTN goes live and GST law passes in both the houses.
GSTN (Goods and service tax network) -- It is a non-government, nonprofit organization that handles the entire its system of the GST.
Launch -- On in 2017 four additional supplementary GST bills passed in Lok Sabha and approved by the cabinet and then Rajya sabha passes four supplementary GST bills. Then finally the GST had launched on July 1, 2017.
And On 12 August 2016, Assam became the first state, Bihar (16 August).
Division of GST
(CGST) -- The meaning of CGST is Central goods and services tax. It is one of the parts of goods and service tax. It follows the concept of one tax one nation and it comes under central goods and services act 2016.
CGST will be applied for all the goods and services in which consideration is their and proceeds would be divided between the central and state governments.
(SGST) - The meaning of SGST is State goods and services tax. It is one of the parts of goods and service tax. It follows the concept of one tax one nation and it comes under central goods and services act 2016.
SGST is charged by the state governments through a statute on all the deals of supply of goods and services. And the amount will be paid to the accounts of the particular State Government.
(IGST) - the meaning of IGST is Integrated goods and services tax.it is one of the parts of goods and service tax. It follows the concept of one tax one nation and it comes under central goods and services act 2016. When the goods and services movements occur from one state to another IGST will be applied.
Benefits of GST
In 2014 Arvind Subramanian helped to design the country's goods and services tax(GST) and in July 2017 GST restore the assortment of value-added, excise taxes and sales impose by 29 states and the federal government.
1. Due to GST, there is the elimination of cascading effects of taxes.
2. Due to GST, there is a composition scheme for small businesses.
3. Due to GST, the number of compliances is lesser.
4. Due to GST, there is a defined treatment for E-commerce operators.
5. Due to GST, the efficiency of logistics become improved.
6. Due to GST, the unorganized sector is regulated.
7. Due to GST, the registration and filing return made simple as everything is done online.
8. Due to GST, the number of indirect taxes reduces.
9. Due to GST, it allows the transparent and corruption-free tax administration.
10. Due to GST, it aimed at reducing corruption and sales without receipts.
Drawbacks of GST
1. GST increases operational costs.
2. It is an online taxation system.
3. GST creates SMEs(Small and Medium Enterprises) will have a higher tax burden.
4. GST increased costs due to software purchases.
5. GST faces criticism for being called a "Disability Tax".
6. The transaction fees of GST become more expensive within the financial sector from 15% to 18%.
The character of GST in the Indian Economy
Goods and service tax having an important character in the Indian economy. The main reason for introducing GST in India is to remove the cascading of taxes in India. Cascading of tax is nothing but forced on already taxed products. So due to this, there is a huge burden on people in terms of prices of products. So GST main focus is to eliminate this cascading of tax.
Due to GST our economy becomes one step closer to the common market as like free movement of capital and services. After GST doing business has become easier and trouble-free. Due to GST introduction, it hardens the country supply chain. It facilitates transparency and dealers can track their shipments proved itself as a game-changer for the Indian economy.
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To this post, I explained the outcomes of the GST. Really, it was a fruitful guide by the government of GST (Goods and Services Tax).
After all, this guide contained the all most all fruitful information of the GST.
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