2 years of GST
The landmark one-nation, one-tax reform, the Goods and Services Tax (GST) was introduced on July 1, 2017. In its two year journey, it has shown some hiccups, a little more challenges and a lot of potential for future growth.
What is GST?
- The Goods and Services Tax is a destination based, value-added tax on the final consumption by the entire nation on the same tax base.
- It is an indirect consumption-based tax.
- It was passed in 2017 after a lot of political deliberation and required a comprehensive overhaul of the Indian Taxation system as the 101st amendment in the constitution of India.
- There are currently 4 slabs (5%, 12%, 18%, and 28%) along with another slab for goods have no tax (0%) on them. On some luxury goods, an additional cess is also levied.
- Most products fall in either of the 5 categories but there are some exceptions.
- Mainly, electricity, alcohol for human consumption and petroleum products have been left out of the GST list.
- GST is governed by the GST council has 33 members. It is chaired by the Union Finance Minister.
- Goods and Services Tax Network is a non-profit organization now wholly owned by the state and central governments which were formed for the creating and supporting the network needed to handle GST.
The Big Picture
Ever since the implementation of the GST, the tax returns have been rising even when rate cuts are being effected in the GST rooster. The gains of the enormous risks taken have started to show up. However, it is also a time for reform as Tax slabs in the GST can be reduced, reduce non-essential clutter like paperwork and implement measures to curb evasion and improve revenue realization.