GST: ONE NATION, ONE TAX' - IS THIS REALLY MAINTAINED, CONSIDERING STATE TAXES ?

 

INTRODUCTION

 

One, though GST's slogan was "one nation, one industry, one taxation s", we have turned out with `` one nation, one industry, five taxation rates ''. All different countries that have implemented GST have taken the limit of two tax rates. But India would be the first country that would take five taxes — zero, 5 per cent, 12 per cent, 18%, and 28%. Double taxes can cause confusion and increase costs of compliance for corporations, negating the great benefit of the GST. Grouping of these various goods and services these five rate categories — the activity that can be brought up in May — can be a difficult activity. Furthermore, providing five tax rates means that other interest groups can make competing to get themselves run to the lower tax rate.

 

IS THIS REALLY MAINTAINED, CONSIDERING STATE TAXES ?

 

The word ‘Tax’ springs from the Latin word ‘Taxare’ which suggests ‘To Estimate’. A tax is an enforced contribution, exacted pursuant to legislative authority. Taxation System in India includes both Direct and tax. Goods and Services Tax (GST) is one among the foremost debated Indirect Taxation reforms. GST may be a comprehensive tax regime levied on manufacture, sales and consumption of products and services. it's expected to cause 2% incremental GDP growth of the country. Therefore, the introduction of GST would be a considerable step within the reform of indirect taxation in India.

 

Merging several Central and State taxes into one tax would diminish cascading or double taxation, facilitating a standard national market. The simplicity of the tax would cause easier administration and enforcement. From the consumer point of view, the main advantage would be in terms of a discount within the overall tax burden on goods, which is currently estimated at 25% - 30%, free movement of products from one state to a different no end at state borders for hours for payment of state-tax or entry-tax and reduction in paperwork to an outsized extent.

 

GST was first introduced during the 2007-08 budget session. On 17th December 2014, the present Union Cabinet Ministry approved the proposal for the introduction GST Constitutional Amendment Bill. On 19th December 2014, the bill was presented on GST in Lok Sabha. The Bill is presented in the Budget session. the present central government is extremely determined to implement GST Constitutional Amendment Bill. at the present, there are around 160 countries that have implemented GST or VAT in some form or other. In some countries, VAT is that the substitute for GST, but conceptually it's a destination-based tax imposed on the consumption of products and services. France was the primary country to introduce GST in 1954. Right now, only Canada features a dual GST model (somewhat almost like the twin GST Model that India goes to implement).

 

Many experts have suggested that to resolve the problems of various sorts of taxes, there's a requirement to streamline all indirect taxes and implement a ‘single taxation’ system. this technique is entitled as Goods and Services Tax (GST). Goods and Services Tax because the name implies, it's a tax applied both on goods and services at a consistent rate. In simple term, GST may be a tax that folks got to pay on supply of products and services. a person, who is providing or supplying goods and services is susceptible to charge GST. one sort of tax referred to as GST is going to be applied throughout the country, replacing a variety of other indirect taxes like VAT, Service Tax, CST, CAD etc. Therefore, GST shall be the most important tax reform providing a consistent and simplified way of indirect taxation in India. GST may be a consumption-based tax (i.e.) supported the ‘Destination Principle’. Thus, GST is imposed on goods and services at the place where the particular consumption happens.

 

Negative Impact of GST

 

· Service rate @ 15% is presently charged on the services. So, if GST is introduced at a better rate which is probably going to be seen within the near future, the value of services will increase (i.e.) all the services like telecom, banking, airline etc. will become costlier.

· The increased cost of services means, an add-on to your monthly expenses.

· you'll need to reorganize your budgets in touch the cost of the extra service.

· a rise in inflation could be seen initially.

· If the actual benefit isn't passed to the buyer and therefore the seller increases his margin of profit, the costs of products also can see a rising trend.

But the speed of GST and the way effectively GST has introduced altogether the States and at the Centre also plays an important role choose the particular impact of GST.

 

Positive Impact of GST

 

· A unified legal system removing a bundle of indirect taxes like VAT, CST, Service tax, CAD, Excise etc.

· A simplified tax program as compared to the earlier tax structure.

· evasion will become difficult.

· Removes cascading effect of taxes (i.e.) removes tax on tax.

· thanks to the lower burden of taxes on the manufacturing sector, the manufacturing costs are going to be reduced, hence prices of commodity likely to return down.

· thanks to reduced costs, some products like cars, FMCG etc. will become low-priced.

 

CONCLUSION

 

India is ready to introduce Goods and services tax after crossing the varied hurdles in its way. GST may be a long-term strategy planned by the govt and its positive impact shall be seen within the end of the day only. Also, this will happen if GST is introduced at a nominal rate to scale back the general tax burden of the ultimate consumers. allow us to hope GST will leave a positive impact and can help to boost up the Indian economy and can convert India into a unified national market with simplified tax regime. A rising Indian economy will anyways help within the financial growth of the commoner! allow us to hope this ‘One Nation - One Tax’ proves to be a game-changer during a positive way and proves to be beneficial not only to the common man but to the country as an entire. There are various challenges in way of GST implementation as discussed above in paper.

They need more analytical research to resolve the fighting interest of varied stake-holders and attain the commitment for fundamental reform of tax structure in India.