The new indirect tax regime GST has brought about a complete revolution to the way taxation works within the country. And one of the most significant parts of this regime has been its emphasis on promoting Digital India. The regime has brought everything online, and it has a website where you can find out the latest GST news and make any kind of related GST search for getting any type of information. Moreover, there is also an online portal facilitating online registrations, payments, and a lot more.
But, that is not it for GST. When you say this word, you sure are inviting a considerable discussion. The topic is so vast. And whether the person you are talking to knows about GST or not, he or she will, without a doubt, have something to say about it. But, incomplete knowledge will do no good. It will only lead to controversies. So, here we have for you everything that you need to know about GST so that the next time when you discuss GST, you emerge as a GST expert.
What is GST?
GST, Goods and Service Tax for the full form, is the new indirect tax law introduced in the company in the year 2017. The purpose behind introducing this law was to bring uniformity in the diverse indirect tax laws applicable to the suppliers of goods and services. This law has repealed Service Tax, Sales Tax, VAT, and Excise Duty, and now the suppliers of goods and services have to pay a single tax under the GST law.
History of GST
Although introduced only in the year 2017, the story of GST is very old. It dates back to the beginning of the 21st century. The proposal to introduce GST was brought up for the first time under the Atal Bihari Vajpayee Government in the year 2000. Then a committee to look through the proposal was set up in the year 2003. The discussions, meetings, reports, developments, preparations, protests, changes, and further developments, all of this took seventeen long years for the Act to take its form.
In the entire period of these 17 years, the Parliament dealt with a total of 4 bills. And after the final passing of the fourth bill by both the Lok Sabha and Rajya Sabha and the assent of President, the bill was finally declared as the Goods and Service Act,2017.
The Act has since its inception shown that it has come to bring reform. The reason can be the way it became applicable. In general, all tax laws are made applicable from March 31st, mid-night. GST was an Act that became applicable in the mid of the year on July 1st, 2017. This was a reform in itself. The other reformation can is the way GST has impacted the taxpayers and the economy as a whole.
Positive Impacts of GST
The positive impacts are the fantastic advantages that have come with the Act. From reducing the cascading effect due to double taxation to bringing the tax offices at the doorsteps of the taxpayers, the Act has delivered a considerable level of benefits, comfort, and convenience.
Advantages of GST
- Elimination of Cascading Effect Due to Double Taxation: Due to the diversity in the taxes in the earlier indirect tax framework, there used to be incidences of double taxation. The manufacturers and suppliers ended up multiple taxes in the form of service tax, VAT, sales tax, and excise duty. This was very burdensome for the taxpayers and had a significant cascading effect. With the coming of GST, all these taxes stood repealed, and everything came under this single, uniform tax, GST. This eliminated the double taxation and cascading effect and gave much-needed relief to the taxpayers.
- Less Burden on TaxPayers With Increased Exemption Limits and Composition Schemes: The exemption limits under the GST regime have been significantly increased. Now the small manufacturers need not take registration under the Act. Moreover, a composition scheme has been introduced for them providing them significant benefits with the facility to pay tax as a percentage of their turnover. All this has significantly reduced the burden on the taxpayers, especially small businesses.
- Promotion of Digital India: The GST regime has brought everything online by introducing an online portal and its website. You can view the latest GST news on the site and search for other important information you need. On the portal, you can make online registrations, payments, download certificates, and file your returns. The portal even maintains an online record of the GST payments made by you in the form of a cash ledger account. All this has dramatically promoted the concept of Digital India and made the tax regime more advanced.
Negative Impacts of GST:
Despite the advantages of GST and its success, the Act has not been entirely successful and has negative impacts too in the form of certain disadvantages.
Disadvantages of GST
- Increased Operational Costs
The introduction of GST has significantly increased the operational costs for the businesses. These costs arise from the need to purchase software that are necessary to maintain compliance with GST. Moreover, GST is not that easily understandable by a layman. So, the businesses need to employ GST professionals to take care of compliances with GST law.
Other Aspects of GST
There are a lot more other aspects of GST. The law is exceptionally vast in scope and extensively defines a lot of things. It has provisions for everything, be it registration, payments, or filing of returns. Not only that, but the law also describes in detail the persons who need to take the registration and the ways they can take it. Besides that, the law also specifies the dates and deadlines within which payment must be made, and returns must be filed. It also specifies the penalties for non-compliances.
The scope of the Act is very vast, and you can find all such information regarding registration, return filing, payments, and penalties by a bare reading of the GST Act, 2017. That can significantly increase your knowledge about the Act.
Besides that, you must always keep following the GST website for latest GST news and other related GST search, so that you always remain updated and informed about the changes taking place in the Act.
Smriti Jain is the owner and senior content publisher at Financesmarti. Financesmarti is a website where she shares a lot of useful stuff for the people and business of India. This includes small business ideas and other banking information, as well. Smriti completed her education in science & technology from Delhi University. Smriti usually has interests in digital marketing now, and she has chosen this career for the full-time opportunity. The primary purpose of starting this blog to provide quality information on the banking industry to the people.