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Goods And Services Tax ( Gst ) Essay

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WHAT IS GOODS AND SERVICES TAX (GST)?

GST is a simplified tax structure applied on both goods and services. It is value-added tax levied at all points in the supply chain with credit allowed for any tax paid on input acquired for use in making the supply. It would be applicable on supply of goods or services as against the prevailing system of tax on the manufacture of goods or on sale of goods or on provision of services. It would be a destination based tax as against the existing system of origin based tax. In order to maintain the federal structure, the nation is going to have dual GST, central GST (CGST) and the state GST (SGST). This means that there will be common tax base for both the centre and the states. There will also be integrated GST (IGST). It would be levied on inter-state supply of goods and services. This would be collected by the centre so that the credit chain is not disrupted. Import of goods and services would be treated as inter-state supplies and would be subject to IGST in addition to the applicable custom duties. Rates for all the three would be decided by the GST council.

Why our nation needs goods and services tax?
India has multiplicity of taxes as the constitution prescribes different powers for the centre and the states to make legislations for levying taxes on goods and services at various levels. For example, t central government is authorized to make legislation as well as rules to impose tax on the manufacture of goods (except alcoholic
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