Page 1 of 7
Journal for Studies in Management and Planning
Available at
http://edupediapublications.org/journals/index.php/JSMaP/
ISSN: 2395-0463
Volume 04 Issue 03
March 2018
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 129
Gst-Nation on The Path Of One Tax
Geetanjali Bhutani
Asstt. Prof. of Commerce
Dyal Singh College, Karnal
ABSTRACT
Goods & Service tax is a comprehensive value added tax on goods and services. It is collected on
value added at each stage of sale or purchase in supply chain. There is no differentiation between
the goods & services for the levy of taxes. It passes through all stages of production &
distribution that‟s why the tax is borne by the final consumer.GST subsumed 17 indirect taxes in
order to single tax system. It also provides the benefit of input tax credit. Input tax credit is the
backbone of GST taxation system. The concept of GST was first mooted in 2000 under the
Prime Minister ship of Shri Atal Bihari Vajpayee in India. Then the recommendations of various
committees and efforts of number of joint working groups of officials of Centre and State
Government result into the launch of GST on July 1, 2017. The GST reform is expected to bring
in a lot of changes in Indian economy. The present structure of Indirect Taxes is very complex in
India. There are so many types of taxes that are levied by the Central and State Governments on
Goods & Services. This paper studies the impact of GST on Indian economy.
Introduction
The Goods and Services Tax (GST) is a vast
concept that simplifies the complicated tax
structure by supporting and enhancing the
economic growth of a country. By
amalgamating a large number of Central and
State taxes into a single tax, it would
mitigate cascading or double taxation in a
major way and pave the way for a common
national market. From the consumer point of
view, the biggest advantage would be in
terms of a reduction in the overall tax
burden on goods, which is currently
estimated to be around 25%-30%.
Introduction of GST would also make Indian
products competitive in the domestic and
international markets. The Government GST
regime seeks to subsume various indirect
taxes, with three separate legislations
namely CGST(central GST, collected by the
central government), SGST(state GST,
collected by the state government) and
IGST(integrated GST, collected by the
central government). GST would be
applicable to all transactions of goods and
service, and it to be paid to the accounts of
the Centre and the States separately.
Objective of study
To study the journey of GST
To study about the Challenges of
Introduction of Goods and Service
Tax
To analyze the Impact of Goods and
Services Tax (GST) on Indian
Economy.
Page 2 of 7
Journal for Studies in Management and Planning
Available at
http://edupediapublications.org/journals/index.php/JSMaP/
ISSN: 2395-0463
Volume 04 Issue 03
March 2018
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 130
Methodology
This being an theoretical research so the
data used in this research is mostly
secondary data from respective journals,
magazines and newspapers etc. covering
wide collection of academic literature on
Goods and services tax.
Journey of GST
In 1999, for the first time prime minister
Atal Bihari Vajpayee proposed for inception
of GST. In 2000,He set up the committee to
draft the law and in 2004 a taskforce
concludes that GST must be implemented to
improve the current tax structure. Thereafter
the idea of moving towards the GST was
mooted by the then Union Finance Minister
in his Budget for 2007-08. Initially, it was
proposed that GST would be introduced
from 1stApril, 2010. The Empowered
Committee of State Finance Ministers (EC)
which had formulated the design of State
VAT was requested to come up with a
roadmap and structure for the GST. Joint
Working Groups of officials having
representatives of the States as well as the
Centre were set up to examine various
aspects of the GST and draw up reports
specifically on exemptions and thresholds,
taxation of services and taxation of inter- State supplies. In 2010 project to
computerize commercial taxes launched but
GST implementationwas postponed. From
2011-2013 , constitution amendment bill
was passed that enables GST law to be
introduced, standing committee begins
discussion on GST & present the report on
GST .In 2014 GST Bill reintroduced in
parliament by Finance minister &in 2015 it
was passed in Lok Shaba but not passed in
Rajya Shaba. In 2016 amended model of
GST law passed in both the houses of
parliament & the president gives his assent
regarding this Bill. In 2017 four
supplementary GST bills was passed in both
the houses of parliament. Finally The One
Hundred and First Amendment of the
Constitution of India, officially known as
The Constitution (One Hundred and First
Amendment) Act, 2016, introduced a
national Goods and Services Tax in India
from 1 April 2017.It came in force on
1
stJuly2017. One India, one tax became
reality on the 1st of July, when goods &
service tax came into effect. This landmark
moment in the history of modern India
comes after 20 years of debate &
negotiations among states & successive
central governments from different parties,
members of parliaments and other interested
stakeholders.
Page 3 of 7
Journal for Studies in Management and Planning
Available at
http://edupediapublications.org/journals/index.php/JSMaP/
ISSN: 2395-0463
Volume 04 Issue 03
March 2018
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 130
Features:
1. Dual GST
It would be a dual GST with the centre &
states simultaneously levying tax on
common base. The GST to be levied by
centre on intra-state supply of goods &
services would be called the Central tax
(CGST) & that to be levied by the States
including Union territories with or without
legislature would be called the State tax
(SGST)/Union territory tax (UTGST)
respectively.
2. Destination based consumption tax
The GST would be applicable on the supply
of goods & services as against the present
concept of tax on the manufacture or sale of
goods or provision of services. It would be
destination based consumption tax. This
means that tax would accrue to the state
where the consumption takes place.
3. Path to one tax
GST seeks to replace 17 indirect taxes,
including 8 central and 9 state level taxes,
and 23cesses of the centre and states
therefore eliminating the need of filling
multiple returns and assessments and
rationalizing the treatment of goods and
services along the supply chain from
producers to consumers. In India, GST has
been taxed at varied rates of 5 per cent, 12
per cent, 18 per cent and 28 per cent, with
lower rates for essential and necessary goods
and higher rates for luxury goods.
4. Threshold exemption
Taxpayers with an aggregate turnover in a
financial year up to Rs. 20 lakh would be
