NITISH DEY :Goods and Services Tax is a kind of an indirect tax. GST is imposed on the supply of goods and services within the economy at every step of the production process. But, this GST is meant to be refunded to all parties at the various stages of production other than final consumer.
There are five slabs in the goods and services tax such as, 5%, 12%, 18%, 28% and 32%. The petroleum products, alcoholic drinks, electricity are not taxed under the GST and instead are taxed separately by the individual state governments, as per previous tax regime. There is a special rate of 0.25% on rough precious and semi precious stones and 3% on gold. The 28% GST applies to the few items such as aerated drinks, luxury cars and tobacco products. This tax came into being from July 1, 2017 through the implementation of the one hundred and first amendment of the constitution of India by Govt. of India. The tax replaced all the taxes that was levied by the central and state government.
History was created with the introduction of goods and services tax in India’s economy after intense debate for more than a decade and this history of the introduction of GST is not insignificant or miniscule. The reform was started in the year 1985 by Viswanath Pratap Singh, finance minister of Rajib Gandhi’s government with the introduction of Modified Value Added Tax (MODVAT). Then P V Narasimha Rao with his finance minister Manmohan Singh introduced the Value Added Tax (VAT). Then the single GST was proposed and given go ahead in 1999 during the meeting between prime minister Atal Bihari Vajpayee and his economic advisory panel and a committee was set up headed by the finance minister of West Bengal, Asim Dasgupta to design the GST model. In the year 2002, the Vajpayee government formed a task force under Vijay Kelkar to recommend tax reforms and the committee recommended rolling out of GST as suggested by 12th Finance Commission. Then the finance minister of the congress led UPA government P Chidambaram worked on the same on February, 2006 and proposed a roll out by 1st April, 2010. In the year 2011, Asim Dasgupta resigned as the head of the GST committee and he admitted that 80% of the task has been done. Then Bharatiya Janata Party led NDA government was elected into power in the year 2014 with ultimate majority and set a deadline of 1st April, 2017 to implement GST.
The proposed GST was launched on 1st July, 2017 at midnight by the President of India and the Government of India marked by a historic midnight session of both houses of Parliament convened at the Central Hall of Parliament though the session was boycotted by the opposition due to predicted problems that it was bound to lead for the middle and lower class Indians. The GST termed as “One nation, one tax” by the NDA government and the Prime Minister Narendra Modi. It also provides a simplified, single tax regime in line with the tax framework applicable across the globe. It is four tier tax system for goods and services which is based on principle of equivalence make sure that different economic class should not be taxed at the same rate. The GST council is the governing body of the GST. It have 33 members and chaired by Indian finance minister. It was responsible for any kind of rate change in the GST.
As one year have passed since the introduction of the GST, the GST has certainly reduced multiplicity of taxes and thus created a simplified tax regime to promote ease of doing business. GST would be instrumental in reducing economic distortions, which in turn provide necessary impetus to economic growth. The Economic Survey predicted India’s GDP growth to be between 6.5% and 6.75% in 2017-18 compared to 7.1% in 2016-17. The Index of Industrial Production(IIP) showed average growth of 5% from July 2017 to January 2018 which is higher than the 3.9% growth registered between July 2016 and January 2017. Total revenue collection crossed Rs. 1 lakh crore-mark for the first time in April 2018 and total number of companies registered between July 2017 and February 2018 is 68,299 compared to 63,106 in the year 2017.GST revamped many companies in the way to business.
Undoubtedly, a periodic compliance required under GST regime presented its share of challenges. In this period, compliance related experiences with the GST haven’t been smooth and government had a difficult task of updating various functions ever since the GST portal was made operational in July 2017. The main idea behind the GST implementation was to levy a single tax on goods and services resulting a free flow of credit in the economy. However, at present, certain products such as petrol diesel, airline turbine fuel and natural gas, alcohol and immovable property are outside the GST regime. This is defeating the purpose for implementing the new regime. This products should come under the proposed GST regime to make GST a grand success.