The Way Forward The Goods and Services Tax (GST) was introduced in India on July 1, 2017, after several rounds of deadlock in Parliament. Observers described the reform as the most significant change to India's tax regime since the country became independent in 1947. A late-night parliamentary session was fitting for the historic moment. Although Indian Prime Minister Narendra Modi is the driving force behind the GST, this historic reform reflects the collective will of 135 million people represented in the sovereign parliament and state legislatures. The launch was, however, boycotted by several parties. Say no to plagiarism. Get Custom Essay on “Why Violent Video Games Should Not Be Banned”?Get Original EssayGST was created to encompass various indirect taxes levied at different levels, with the aim of reducing repetition bands, plugging leakages and reduce the path to a transparent indirect tax regime. What is GST? GST is intended to be a unified country-wide indirect tax on goods and services. In the current system, tax is levied separately at each stage by the Union government and the states, at varying rates, on the total value of the goods. But under the GST system, tax will be levied only on the value added at each stage. This is a single tax (collected at multiple points) with full offset of taxes paid earlier in the value chain. Thus, the end consumer will only bear the GST charged by the last reseller in the supply chain with compensation benefits. at all previous stages. GST is classified into two types: State GST and Central GST. What is State GST and Central GST? For transactions within a state, there will be two components of GST – Central GST (CGST) and State GST (SGST) – levied on the value of goods and services. The Center and states will simultaneously levy GST across the value chain. The impact of GST on the process of producing goods and services will largely depend on the item in question. It will also depend on the state government concerned and its intervention in controlling prices of essential commodities. Milk, for example, whose prices are likely to skyrocket after the implementation of GST, can still be sold at cheaper rates, if the state government provides a subsidy on this product. As for those living below the poverty line, GST might not have a direct impact on them as such, as basic necessities like food are unlikely to be subject to GST , but increasing GST collections with a wider tax base is expected to provide a boost to GST. the government to allocate more money to social and poverty reduction programs. How will GST help eliminate tax evasion? A comprehensive IT system, GSTN, will provide many universal GST numbers to all manufacturers and traders, stockists, wholesalers and retailers. This will simplify the administration of indirect taxes and plug leakages. The government also plans to encourage compliance with tax obligations by traders. It gives the country a uniform tax and no frequent rate changes. A lower tax burden, a single market to help businesses and no truck queues at state borders. GDP could increase by 2%. Fewer opportunities to escape, which means higher income. Lower taxes to boost exports. What does this mean for businesses? HeThere will no longer be any fear that a state will randomly increase taxes, and taxes will be transparent. Suppliers of goods and services will benefit from an input tax credit for goods used, making the actual incidence of taxation lower than the overall tax rate. The government has classified the items into five main categories: 0%, 5%, 12%, 18% and 28%. Here is the updated list of taxes on goods and services according to the different GST levels. Generally speaking, services are expected to be more expensive under GST as the expected GST rate is higher than the existing service tax rate of 15%, and GST is clearly expected to lower prices of locally manufactured goods due to current effective indirect taxes.being higher than the recommended lower GST rates at 5% and the standard GST rate at 12% and 18%. Thus, the price of certain categories of products may fall depending on the effective rate of indirect taxes currently paid and the tax brackets in which the products are classified under GST. All restaurants, hotel restaurants with room rate less than 7500 rupees, Food parcels, textile works, rail transport services, air transport, e-waste supply. 12% on clothing above Rs 1,000, frozen meat products, butter, cheese, ghee, packaged dry fruits, animal fat, sausages, fruit juices, medicines, tooth powder, matches, coloring books, picture books, etc. The government has chosen four tranches for goods and services - 5%, 12%, 18% and 28%. Additionally, several items are not subject to any levy, while bullion will be subject to 3% GST and luxury and sin goods that fall in the higher bracket will also be subject to a tax which will be used to compensate states for lost revenue. GST will ensure that indirect tax rates and structures are common across the country, thereby increasing certainty and ease of doing business. In other words, GST would make doing business in the country tax neutral, regardless of the choice of location of business. A system of transparent tax credits along the value chain and across state borders would ensure that there are minimal taxes. cascade of taxes. This would reduce the hidden costs of doing business. Benefits of GST: GST will mainly remove the cascading effect on the sale of goods and services. Removing the cascading effect will have a direct impact on the cost of goods. The cost of goods is expected to decrease as tax on tax is eliminated in the GST regime. GST is also primarily driven by technology. All activities such as registration, filing return, claiming refund and responding to the notice must be done online on the GST portal. This will speed up the processes.What changes has GST brought? : GST will improve tax collection and boost the development of the Indian economy by removing indirect tax barriers between states and integrating the country through a uniform tax rate. The Center must act on pending legislation on Goods and Services Tax (GST). As is the case recently, the lack of reforms to the indirect tax regime results in high costs and inefficiencies in multiple ways. For example, blocking input taxes or distorting tax-on-tax and cascading rates could account for up to three-quarters of investment in plant and machinery. The Center must follow up on the