The Constitution of India’s 122nd Amendment Bill was put forth in the 16th Lok Sabha on 19th of December 2014, in order to address widespread issues in taxation. GST is also called as the Goods and Service Tax and it is regarded as an indirect tax that has replaced many indirect taxes in India like VAT, Service tax, excise duty etc. The GST was passed on 29th March 2017, in the Parliament but came into effect on 1st July 2017.
In keeping the federal structure of India, it is proposed that the GST will be issued both by the Central Government (CGST) and the State Government (SGST). Prime Minister Narendra Modi introduced GST in India on the midnight of 1st July 2017.The development of GST took many negotiations as well as revisions before getting launched in India in its final form in the year 2017.
The pros of GST in India are:
a) GST increase in export by removing the custom duties applicable to exports.
b) GST supports Small and medium- sized enterprises (SME).
c) GST increases revenue by extending the tax base.
d) GST enhanced Pan India operations.
e) GST reduces burden of tax on producers and increases the growth through more production.
f) GST provides transparency as the customers will exactly know about the taxes they are being charged.
g) GST abolishes the cascading effect of tax.
h) GST defined treatment for the operators of E- commerce.
i) GST has reduced taxes on some goods by 2% while on the other hand it reduces taxes on other goods such as smartphones and cars by 7.5%.
j) GST has a positive impact on India’s GDP as it is expected to increase by at least 80% within the couple of year.
The cons of GST Bill in India are:
a) Operational costs increase under the GST.
b) Costs increased due to software purchase.
c) SMEs will have a higher burden of tax.
d) During the middle of the financial year GST came into force.
Besides, Goods and Service Tax (GST) in India is not only business friendly but friendly to consumer as well. Moreover, India has taken adoption of two GST model that means both the Central government as well as the State government can administrate it. Hence, GST increased both demand as well as consumption of goods which will improve the economy of India in the long run.
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