The Goods and Services Tax (GST) was brought into force on 1st July 2017 under the Constitutional Act (101st Amendment , 2016. It was incorporated for two basic reasons: first, it would simplify the tax collection process by avoiding the cascading effect of taxation; second, it would increase the revenue of the government.
The Introduction of GST was considered a historic and landmark decision in India’s fiscal administration. There are several reasons to support that GST is better than our old indirect tax regime. First, it leads to frictionless commerce between the states. Second, taxes are buoyant, meaning that if the GDP of the country grows, the tax collection will increase along with it. Third, it leads to removal of the cascading effect of “tax on tax” , meaning that GST subsumes various state and central taxes thus reducing the burden on the customers.
Read More