GST(GOODS AND SERVICES TAX)

Hello Everyone

I am back with a trending topic. Which is the major subject of discussion now days. That is 'GST'. Friends I am not a C.A or master in all these terms, so I'll not tell you core terms or technical things about gst. But i'll try to tell you in very simple words so that you will get it and if you know anything regarding this then please share with me also in comments.

Let's start with it. There are two types of taxes Direct Tax and Indirect Tax. Direct which you pay directly to government i.e. Income Tax, House Tax or Property Tax. Indirect Tax which you don't pay directly to government but is hidden in goods and services which you buy. There were many kinds of Indirect Taxes which you paid before GST for example VAT, Service Tax, Custom Duty, Import Duty, Export Duty, Surcharge, Swachh Bharat Tax etc. Which were hidden in goods or services when you bought.

GST will bring in “One nation one tax” to unite indirect taxes under one umbrella and facilitate Indian businesses to be globally competitive. The Indian GST case is structured for efficient tax collection, reduction in corruption, easy inter-state movement of goods etc.

France was the first country to implement GST to reduce tax- evasion. Since then, more than 140 countries have implemented GST with some countries having Dual-GST (e.g. Brazil, Canada etc.) model. India has chosen the Canadian model of dual GST.

To understand it let's take a simple example. Suppose you buy a pant from a shop and get a bill from shopkeeper. In that bill amount of pant, VAT is shown. But you don't know actually how many taxes are hidden behind that. First of all when manufacturer Imported raw material from other state that time he paid import duty. Then he manufactured and sold to retailer that time retailer paid tax and when pant has finally come to shopkeeper again that time tax applied i.e. Tax on Tax. So you actually don't know how many taxes are hidden in it. Which makes cost of products very high and you think that you only paid VAT. These different taxes were divided between center govt and state govt. So govt simplified it. Govt pulled out an average of all taxes and applied only one Tax i.e. GST. Which is centerlised tax and divided between state govt and center govt. With GST prices of many daily needs articles will be reduced but these can be increased little bit in case of luxurious things. This is very transparent tax and govt wants to include every person under tax slabs.

So always ask for bill whenever you purchase something.


Thanks.