WHAT IS GST?
Tax is the liability on every person, which is mandatory to give. Tax is one of the most common financial terms. Taxes are one of the primary sources of income. The government through tax fulfils various projects and activities. Tax is broadly divided into two categories: direct tax and indirect tax.
- Direct tax – it is imposed on the income of every citizen of India. The amount of tax payable varies according to the income an individual earns. Such as salary, house rent income, property tax, etc. It means more income more tax, less income less tax. Rich pays more tax compared to the poor.
- Indirect tax – it is not comparing the same as a direct tax, not imposed on the income of individuals. It is imposed on goods and services which in turn increases the cost of goods and services. Indirect taxes are borne by the end of the customer. Poor and rich are alike. Some of them levied by the central and state government.
GST stands for Goods and Service Tax. It has been introduced to replace multiple indirect taxes levied by both the central and the state government. GST replaced indirect taxes like exercise duty, VAT, customs duty, service tax, and entertainment tax, etc.
It is levied on all goods and services produced or supplied or imported in India. Except on the exports, not subjected to Goods and Services Tax. Goods that are kept outside from GST purview includes alcohol for human consumption, petroleum products like crude oil, petrol, high-speed diesel, motor spirit, turbine fuel, natural gas, and electricity.
ADVANTAGES OF GST
- GST has bought several indirect taxes like service tax, central exercise, sales tax, entertainment tax, etc. under one umbrella.
- GST has improved the transparency of the tax-collecting process.
- GST aims at reducing corruption and sales without a receipt.
- GST brings accountability and regulations to the unorganized sectors like textile industries.
- GST has reduced tax on certain goods by 2% and others by 7.5% like cars and smartphones.
- GST helps in removing double taxation at multiple points from manufacturer to retailer outlets.
- GST helps in eliminating complications that were present in the earlier VAT system. E-commerce businesses got differential treatment. But GST has removed all confusions regarding this.
DISADVANTAGES OF GST
- There is an increase in the cost of software purchase. As GST is a completely IT-driven law.
- GST faces an extra level of complexity because companies that operate in multiple states must register in all the states.
- GST is also known as disability tax. As it put items like wheelchairs, hearing aids, etc under the tax net.
- GST transaction fees in the financial sector have become more expensive as it increases from 15% to 18%.
- In GST insurance premiums have become more expensive.
- GST goes against the idea of unification of commodities as petrol is not included in the tax.
- Tax officers and others related to such officials need extensive and exhaustive training. To implement and monitor the new rules in an effective manner.
This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being. Further, despite all efforts that have been made to ensure the accuracy and correctness of the information published, White Code Legal and Tax shall not be responsible for any errors caused due to human error or otherwise.
