Essay on GST How will it work in India? for Class 10, 12, Mains Exam (UPSC, PSC, SSC)
GST How will it work in India? Essay : Good and Service Tax also known as one tax for all goods and services, had been implemented since the year 2017 in India. This has brought about major changes in the tax and financial system of the nation.
About GST
Goods and Service Tax also known as GST had three tax structures known as IGST Integrated Goods and Service Tax, CGST Centre Goods and Service Tax and SGST State Goods and Service tax. These sub tax structures have wiped out the previous tax system of Service Tax, VAT and Excise duty on several goods and services and has brought them under one tax regime. Very few goods like alcohol, tobacco, fuel, etcare chargeable under VAT and Excise duties and are charged at a higher percentage. The GST has been segregated into different tax rates for different types of goods and services. For example a restaurant would charge 5% on a food bill, other services like air ticketing or purchase of certain goods would be charged at 18% GST while some at 12%. These tax rates have made it easier for taxpayers to charge and recover taxes due to be paid to the Government.
Purpose of GST and benefits
Goods and Service Tax has brought a positive change not only in the tax system but also has been able to track down most of the tax evaders and impose severe punishments and fines to them. The GST is also divided into interstate and interstate wherein the goods and service law are taxed according to the point of sale of service.
For example goods or services sold from Goa to Maharashtra the IGST also known as Integrated goods and services tax would be imposed. While a sale or service made within Goa CGST and SGST would be imposed.
The GST online portal has made it very convenient for taxpayers to file timely GST returns and also claim GST credit input. This has helped in a seamless taxation system for the country. This has also resulted in uniformity of tax rates and tax regime across the country.This will help the country in boosting its exports in international markets.
The consumers are also aware of the tax rates on goods and services due to the transparency in the tax system, this will help reduce exorbitant pricing on goods and services and the overall price of the commodity will be lower. This helps in curbing the prices of commodities this making goods and services at controlled tax rates by the Government.
FAQs on Goods and Service Tax
1.) What are the four types of GST?
Ans. There are four different types of GST as listed below:
The Central Goods and Services Tax (CGST)
The State Goods and Services Tax (SGST)
The Union Territory Goods and Services Tax (UTGST)
The Integrated Goods and Services Tax (IGST)
2.) What is the limit of GST registration?
Ans. There has been no change in the threshold limits for service providers. Persons providing services need to register if their aggregate turnover exceeds Rs. 20 lakh (for normal category states) and Rs. 10 lakh (for special category states)
3.) Who is liable for GST?
Ans. In general, the supplier of goods or services is liable to pay GST. However, in certain cases like imports and other supplies, the liability may be on the recipient under the reverse charge mechanism.
4.) What is RCM in GST?
Ans. In GST, the supplier of goods or services is liable to pay GST. However, in certain cases like imports and other supplies, the liability may be cast on the recipient of the service or goods under the reverse charge mechanism.
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