GOODS AND SERVICES TAX (GST)

Preface:-

Goods and Services tax import  Value Added Tax (VAT) , that is indirect tax levy on manufacture , sale and expenditure of goods and also  services at the national level. Implementation of GST in India is ‘Dual’ in temper.

The prior system of indirect taxation had a glut of taxes recoverable by the Government. This had led to complex and conflicting principles of taxes levied by the centre and states. There was no analogousness in tax rates and structure across states. Goods and Services Tax ,which subsumes a large number of central and state taxes into a single tax is meant to reduce the cascading effect of taxes provides consolidate credit and  makes way for a common market.

Constitutional Reform:­­­­­­­­­-

The object of national Goods and Services Tax was mooted  by kelkar Task Force in  2004. GST availed momentum  in the year 2014 and become the constitution (101^st Amendment Act ) ,2016 , that paved the way for the introduction of the GST. The constitution (101^st Amendment ) Act , 2016 has 20 section and  also inserted   new Article 279A which empowering president to constitute GST council was notified on 12.09.2016.

Flaw  in earlier  tax laws:-

1. Double taxation of a transaction as both goods and services.
2. Non – integration of VAT  and Service tax.
3. Non inclusion of several local levies in a state VAT.
4. Cascading effect of taxes on account of-
5. Levy of non VATABLE CST
6. Inclusion of CENVAT in the value for imposing VAT.

Issue in  implementation of GST:-

The body structure of GST accomplish if the country has a strong IT network. Surplus, the GST dispensation seems to lay aside  the emerging sector  of e-commerce. India  has adopted dual GST instead of national GST . This dual ethos made the thorough body complicated in India. The  centre has to counterpart  with 28 states 9 union territories that why is likely to create economic as well political issues.

NOTION OF GST :-

• GST confer comprehensive and continuous chain of tax credits from the producer.

• There is no tax on tax or cascading of taxes under GSTs system.

•  This GST does not differentiate between goods and services  therefore, the two are taxed at single rate.

• GST  is a value added tax levied on manufacture , consumption of goods , service and sale .

•  Every person will get credit for the taxes paid at earlier stage. The consumer will bear the final tax.

FABRICATION  OF GST LAW:-

• Central Goods and Service tax Act,2017 (CGST)
• State Goods and Service tax Act, 2017(SGST)
• Union territory Goods Services tax,2017(UTGST)
• Integrated Goods and Services tax, 2017(IGST)
• GST Compensation Act,2017

TRANSIONAL PROVISIONS:-

1. Every person registered under VAT ,central excise or services tax etc. Having a valid PAN would be provisionally registered .  Further  , particulars to be provided (online) to enable final registration.
2. Where  taxable person having centralized  registration under the earlier law has obtained a registration under the CGST Act , such person shall be allowed to take in his Electronic Credit Ledger, the credit of the amount of CENVAT credit carried forward in a return , in respect of the period ending with the day immediately preceding 1^st July ,2017.
3. The common input services for services received before GST by an Input Services Distributor would be available for distribution as credit under GST  even if invoice (s) relating to such services is received on or after implementation of GST.
4. Many dealers and works contractors may not find it economically viable especially if, they are into business to business (B2B)transactions. However , if such dealer opt for a regular scheme under GST, the credit on inputs held in stock and inputs contained  in semi –finished or finished goods held in stock on 1^st July, 2017 is allowed subject to certain condition.
5. All manufacture / traders and to a lesser extent services providers would have stock of goods which may be in the from  of raw  material and finished goods.

DRAW BACK OF GST:-

• GST  given the control of businesses to central and state  government with businessmen binding by laws. This arised complexity for many businessmen over  the nation.
• Everything is online under GST and it is create issue  for small businesses/ taxpayers people are computer illiterates and do not have computers and concerned  infrastructure.
• GST will increase the operational costs due to employing of tax professionals to be GST complaint. Further , businesses will need to  train their employees in GST adherence.
• Under new businesses and small people may require  hiring professionals . it will generate problems for small and new businesses.
• In new GST system Adoption and migration is a complex task  for which the GST council  has made various relaxation over the period.
•    GST  is being envisaged  as a single taxation system but in real it is a dual tax in which state and centre  both collect separate tax on a single transaction of sale and service.
• In GST businesses have to either update their existing accounting and ERP software to GST – Complaint one and buy a GST software so that they  can keep their business going , but both the options lead to enhanced  cost.
• Under GST also there are varied  tax rates.
• There are issues because of varied state registrations  under GST. Businesses and Firms are now needed to register for GST in every state they operate.

CONCLUSION:-

In the conclusion  we can state that GST conferred new opportunity to bring ONE NATION  and ONE MARKET. Centre and State  major through widening of tax base and improvement in tax adherence and have a positive impact on various sectors and industry as well. Electronic  processing of tax returns , refunds , and tax payment  through ‘ GSTNET’  without human intervention , will reduce corruption  and tax masquerade.

This article is written by DEEPANJALI TIWARI,BA LLB 4^TH YEAR,LCIT COLLEGE BILASPUR (C.G) during her internship.