View of A STUDY ON GOODS AND SERVICES TAX

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Vol. 02, Issue 06,June2017 Available Online: www.ajeee.co.in/index.php/AJEEE

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A STUDY ON GOODS AND SERVICES TAX Dr. Ashutosh Chandra Dwivedi

Assistant Professor, Department of Commerce Shri Jai Narain PG College Lucknow Abstract:- GST or goods and services Tax, the finest tax reform in India when you consider that independence which has been lengthy pending. GST is supposed to simplify the oblique tax regime of India via replacing a number of taxes by means of a single unified tax.

GST is the most effective indirect tax that without delay connects all the quarter of Indian financial system hence improving the financial increase of the country by developing a single unified marketplace. Greater than 160 nations of the sector have carried out GST to this point followed by using France. The idea of GST in India changed into proposed by way of Atal Bihari Vajpayee in 1999 and a committee became set up underneath the management of Asim Das Gupta the then finance minister of West Bengal. It turned into supposed to be carried out from 1st April 2010 beneath flagship of P Chidambaram the then finance minister of UPA authorities however due to political issues and conflicting interests of numerous stakeholders it did no longer got here into pressure. In may also 2016 the constitutional modification invoice for GST turned into exceeded by way of Lok Sabha and cut-off date of 1st April 2017 to put into effect GST changed into set through Arun Jaitley the finance minister of India. However, there is a huge outcry towards its implementation. This paper affords a top level view of GST concept, blessings and explains its capabilities at the side of focused in demanding situations confronted by means of India in execution.

Keywords: Goods and services Tax, indirect tax, Indian economic system.

I. INTRODUCTION

“the products and offerings tax law in India is a comprehensive, multi-level, destination-based tax that is levied on every fee addition”. Taxation policy performs a very critical function on the financial system of a country. The main supply of sales of the government comes from the taxes levied at the residents who can be direct or indirect. When the impact and incidence falls on same individual it's far known as direct tax and whiles the impact and occurrence falls on extraordinary people. The load can be shifted to any other individual its miles called as indirect tax. Earlier than the introduction of GST India had a complex oblique tax machine with more than one taxes imposed through union and state one after the other, with the creation of GST all the indirect taxes will be underneath an umbrella and ensuring a easy countrywide market with excessive economic growth rate. GST is a single factor tax levied on the delivery of products and offerings, right from the

manufacturer to the client. Credits of enter taxes paid at every stage might be to be had within the next stages on fee addition, as a result making GST an crucial tax most effective on cost addition at each degree which guarantees that there may be no cascading of taxes. GST will lessen the overall tax burden of purchaser that is currently predicted at 25-30%. The products and services tax or GST that's popular as what it is all over the world turned into first brought in France inside the yr 1954 and subsequently more than one hundred sixty countries had carried out the GST regulation like Germany, Italy, UK, South Korea, Japan, Canada, Australia, etc.

Maximum of the international locations had followed unified GST while some nations like Brazil, Canada observe a twin GST device where tax is imposed both through valuable in addition to by state authorities. India had followed the dual gadget of GST as CGST and SGST. The concept of GST in India turned into

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2 proposed by using Atal Bihari Vajpayee in 1999 and a committee becomes installation underneath the leadership of Asim Das Gupta the then finance minister of West Bengal to design a GST model. It changed into presupposed to be carried out from 1st April 2010 under flagship of P Chidambaram the then finance minister of UPA government but because of political troubles and conflicting interests of various stakeholders it did now not got here into force. In May 2016 the constitutional modification bill for GST turned into passed by Lok Sabha and closing date of 1st April to put into effect GST was set by means of Arun Jaitley the finance minister of India. Eventually the products and carrier tax was released in the dead of night on 1st July with the aid of the president of India, Pranab Mukherjee and high minister of India, Narendra Modi.

Experts have enlisted the benefits of GST as under:

 It would introduce “one country one tax”

 It would absorb all the indirect taxes at the central and state level thus eliminating the cascading effect of tax

 It would bring down the prices of goods and services which in turn will help the companies as consumption will increase

 Higher threshold for registration which will exempts many small traders and service providers.

 In the GST system, when all the taxes are integrated it would eliminate the number of compliances like return filling

 It would help to eliminate the separate tax imposition on goods and services which requires the transaction to split its value among goods and services leading to greater complications

 It would wider the tax regime by covering all the sectors including the unorganised sectors thus

widening the tax base. This would lead to better and more revenue collection by the government.

 GST would simplify the working procedures and would minimise the tax burden of E-commerce and logistics companies

 Employment generation for youths as GST trained experts

1.1 Objective of Study

1. To grasp the concept of GST 2. To study and understand the

features of GST

3. To assess the advantages and challenges in implementation of GST

2 LITERATURE REVIEW

Kelkar (2009) committee recommended that GST will bring qualitative change in the indirect tax system of the country and the GDP will grow due to reduction of production cost leads to enhance consumption by the consumers.

Ehtisham Ahmed and Satya Poddar (2009) suggest in “Goods and Services Tax reforms and intergovernmental consideration in India”

introduction of GST will provide simple and transparent tax system leading to increase in productivity and output of economy but depends on rational design of GST. Pinki, Supriya Kamma and Richa Verma (2014) in “Goods and Services Tax- Panacea for indirect tax system in India”

concluded that the NDA government is positive towards execution of GST will benefit the government and all the stakeholder in long run but importance to be given in IT infrastructure. Monika Sehrawat and Upasana Dhanda (2015) in

“GST in India: A key tax reform”

concluded that introduction of GST will undoubtedly boost the Indian economy but focus should be given on rational design of GST model and timely implementation.

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3 3 RESEARCH METHODOLOGY

An explanatory research is studied based on secondary data collected from various journals, books, government reports, articles and newspapers which focus on different aspects of Goods and Services Tax.

4 CONCEPT OF GOODS AND SERVICES TAX

GST or items and offerings Tax, the finest tax reform in India due to the fact that Independence which has been lengthy pending. GST is meant to simplify the indirect tax regime of India by means of replacing a bunch of taxes with the aid of a single unified tax. GST is a complete, multi-degree, vacation spot-primarily based tax this is levied on each cost addition. GST will deliver a new measurement to the Indian economy by using making a not unusual market and reducing the cascading effect of tax at the cost of goods and services. It'll affect the complete oblique tax machine the tax shape, tax occurrence, tax computation, compliance, input credit score utilization and reporting methods. India had followed the twin system of GST as CGST and SGST. The want for a concurrent dual GST model is based totally on the following:

1. As in line with constitution of India concurrent electricity to levy tax on domestic goods and offerings is supplied to each crucial and state government.

2. As in line with the twin GST version tax can be levied independently via the primary and country government however each will operate in commonplace platform for imposition of taxes, liabilities might be identical.

4.1 Silent Features of GST

1. All transactions on items and services might be protected up besides exempted goods and services.

2. There are two segments of GST, one is central GST and other is state GST. Vital GST can be paid to important authorities and country GST might be paid to respective state authorities.

3. Which means of taxable individual, taxable occasions, chargeability, degree to levy tax, and so on could be identical in CGST and SGST.

4. Management of CGST may be controlled with the aid of relevant authorities and administration of SGST might be managed by way of respective state authorities. The power of creating regulation on taxation of goods and offerings lies with both imperative and country government. A regulation imposed with the aid of important authorities on GST will no longer overrule kingdom GST law.

5. Pan card based totally identity wide variety could be allotted to the taxpayer to facilitate tax charge and return.

6. Tax return to be filled separately to primary authorities for CGST and country government for SGST.

7. Enter credit may be claimed from respective branch where GST paid, i.E. Important GST paid on inputs can be claimed towards relevant GST most effective and equal for country.

8. GST would be relevant if there's an import of products and offerings.

9. Nine. The GST slabs were set at 0%, 9%, 12%, 18% and 28% for specific items and offerings.

10. Integrated items and offerings tax (IGST) also called interstate items and offerings tax is a part of GST that's charged on deliver of products and offerings in the route of interstate alternate which is amassed by using imperative authorities and dispensed to imported states as vacation spot primarily based tax. Extra 1% tax on interstate supply of products which is levied via critical authorities and immediately apportion to the exporter nation.

This tax might be charged for a period of two years or extra as according to the advice of GST council.

11. The union authorities will compensate the states for a duration of five years or greater on advice of GST council for the loss

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4 of revenue arising out of GST implementation.

12. GST council had been installation president and chaired through union finance minister. It's going to constitute of union minister of kingdom in charge of sales and minister in charge of finance or any other discipline nominated via nation government. The representatives inside the council are 2/3^rd from nation and 1/3^rd from union. The choice of council is made by using 3/4th majority of the vote solid and quorum of council is 50%.

5 CHALLENGES

Wall road firm Goldman Sachs, in a observe India: Q and A on GST- increase impact could be Muted‟, has positioned out estimates that show that the Modi authorities’s model for the goods and services Tax(GST) will now not improve boom, will push up purchaser prices inflation and might not bring about accelerated tax revenue collections. There appears to be certain principle loopholes inside the GST model imposed with the aid of the union authorities which can be ineffective in turning in the desired end result.

1. The principle ideology behind implementation of GST-one use one tax isn't suitable for India.

Previously there were 32 taxes which consist of service tax, excise duty, sale tax and 29 country VAT taxes and after implementation of GST it involves 31 taxes which consist of IGST, CGST and 29 SGST which again undergo complex tax shape in the U.S. And rebuts the principle of one United States of America one tax.

2. Every other precept ideology behind implementation of GST-one rate of tax is not feasible in India because of. In step with the one hundred and first amendments in the constitution, Article 246 states that parliament and legislative meeting can impose taxes on goods and offerings. For this reason now not best union government but additionally state authorities had

electricity to have very own GST rate. Article 279 A of the charter states that GST council has best recommendatory powers, now it’s up to country government to levy its own GST rate and distorts the complete GST uniformity price gadget of the country.

3. Authorities had integrated goods and offerings tax community(GSTN), which is responsible for developing GST portal to ensure offerings like GST registration, GST go back filling, IGST agreement, etc. Which calls for robust IT community? It is widely known that India is in an embryonic degree as a long way as it community connectivity is involved.

4. Educated and skilled man energy with updated GST problem know- how aren't without problems available, this had created an additional work load on specialists throughout industry.

5. The Indian coverage marketplace isn't so advanced as much less than 10% of the population has coverage.

This became the cause behind the government initiative “Pradhan Mantri Jeevan Bema Yojna” but with the implementation of GST coverage rates have come to be steeply-priced by means of three hundred foundation factors which turns into hard for insurance groups to penetrate the marketplace and might work as an unfavorable factor against insurance cognizance schemes. The government initiative

“Pradhan Mantri Jan Dhan Yojna‟

initiated that every citizen of have a bank account will face problems as the tax on economic services had raised with the aid of 3% within the new items and services tax regime.

6. The telecommunication zone assumes a extreme trouble as on the only hand the government is beginning virtual India and however telecom offerings is getting costlier as telecom services will entice GST tax fee of 18% that is three% better than the previous carrier tax charge, even if India’s rural teledensity is not even 60%.

7. The GST management intends to preserve petroleum merchandise out of the ambit of GST, being petroleum

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5 products were a primary contributor of inflation in India.

8. Small buyers are careworn with the GST tax charge application and increasing value of operations, as they are unable to find the money for the price of laptop and accounting workforce for maintenance of record and filling of returns underneath GST.

6 CONCLUSION

The products and offerings Tax (GST) dominion is an unconcerned strive by using the authorities to justify the oblique tax structure of the U. S. The authorities ought to look at in depth the GST mechanism installation by means of unique international locations around the globe and additionally their fallouts earlier than implementation. Absolute confidence GST had simplified the prevailing indirect tax system and helps to overcome the cascading impact of tax.

The invoice became delivered to put in force one user one tax but resulted into a pitfall because the charge of primary

items and offerings had long gone upward, in spite of government call for a effective trade within the economic system with a GDP boom charge of 6.3% in Q2 as towards 7.5% within the 2^nd region of ultimate yr. It's far clear that the financial system is slowing down due to unplanned implementation of GST for this reason the disruptions may have accelerated the decline. The handiest possible treatment for this disruption is to make the transition to GST simpler.

REFERENCES

1. https://cleartax.in/s/gst-law-goods-and- services-tax

2. Reserve Bank of India-Publication https://www.rbi.org.in/scripts/PublicationsV iew.aspx?id=17470

3. P Mehra(2015) “Modigovt s model for GST may not result in significant growth push”.

The Hindu

4. Shefali Dani (2016) “A research paper on an impact of goods and service tax (GST) on Indian economy”. Business and economics journal, vol-7 issue 4.