Challenges after implementation of GST Essay : GST also known as Goods and Service Tax, which was introduced in India as a part of reforms and transformation in the tax system. The GST wiped out the service tax system of duty and brought the VAT tax, central excise tax and Service Tax under one roof known as Goods and Service Tax. The main purpose of this implementation was to facilitate simplified system of levying taxes and bringing in a more transparent taxation system into the economy.
GST is a destination-based tax system and levied on the value of goods and services provided. The taxes are being collected from the end user of the goods or services. The GST is charged considering the intra-state and inter-state system of levying the taxes.
GST has certain condition for applying the taxes and rates a prescribed by the system. The rates differ depending on the type of services provided or type or products sold to the consumers depending again on the destination of supply.
The GST system is been categorized into CGST, SGST and IGST. CGST being Central Goods and Service Tax, SGST being State GST and IGST being Integrated GST. With the implementation of GST, several tax payers found it very difficult at the beginning to understand the concept of GST and the rates to be applied for a certain product or service. This has changed the accounting system and taxation system. Most of the accountants had to attend trainings and coachingin order to understand the concepts and GST implementation, with the use of new software systems being updated with GST reforms.
With the implementation of GST, several retailers and wholesalers were un aware of the changes and the actual rates to be applied on the products sold. During the introduction of GST, most of the tax payers found it difficult to file their tax returns with the implementation of the new GST portal. Most of them were un aware of the input charge that could be taken as credit and be set off against the tax payable.
However, GST have helped in reducing tax evasion to a large extent as several raid have been taken up by the departments after few years on its implementation to ensure that GST is not been evaded by the tax payers. The GST has certain limit on businesses which need mandatory registration and filing of returns within the set due dates. There are five tax slabs under GST, that is 0%, 5%, 12%, 18% and 28%. Most goods fall under the 5%, 12%, and 18% tax slab, while certain services are subject to 18%.
GST has transformed the taxation system helping in increasing economic growth the large extent.
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