GST- A BIGGEST TAX REFORM IN INDIA

Abstract

GST- Goods and services tax is the tax which suits perfect for twenty-first century. World has taken a step ahead towards GST long ago. India shifted into GST on 1-7-2017. GST simplified a slew of indirect taxes with a unified tax and is therefore expected to dramatically reshape the country's 2 trillion dollar economy.

Weaknesses in the previous system of indirect taxes:

• Earlier, the tax system was a pack of confusion, litigation and double taxation in a number of cases.
• Cascading effect was a major cause of concern. It was because of CST and Entry Tax.
• The serious matter was involvement of corruption.
• Every state had its own State VAT laws and that too with different provisions, procedures and criterias. However, it was a difficult task for the taxable people who is doing business in two or more states and found it quiet tough to work.
• For every movement of goods, from one state to another, Central Sales Tax (CST) was payable at the rate of 2% , and Input Service Credit i.e. set off of input taxes was not accessible every time.
• In India, movement of goods is taxable from one state to another.
• The system got vague as the difference between goods and services was not defined; it was due to overlapping of Central Service Tax and State VAT.
• Example: Food rated services, IPR related services, lottery, renting of goods, etc.