GST ( Goods & Services Tax ) is a word that is so commonly heard these days but not so commonly understood by people of India. This has been treated as some extra money charged from them whenever they are making any transaction. It is important to create the awareness that this single tax on the supply of goods and services, right from the manufacturer to the consumer.
Introduced in India on 1st July 2017, this indirect tax was applicable throughout replacing multiple taxes imposed by Central and State governments. It is a tax only on the value addition at each stage leaving the final consumer benefitted out of it as the GST will be charged only by the last dealer in the supply chain. The rate of GST is comparatively higher than what is levied in other developed countries like Singapore. It has erased the complications of all other previous taxes like excise duty, service tax, customs duty etc. making the life more simpler in terms of understanding. Taxation in India is administered by both the Union and State Governments as we have adopted a dual GST model . The best part is that since GST is a consumption- based tax, which means the taxes are paid to the state where the goods and services are consumed and not where the goods and services are produced. In simple words, we can say that it is a destination based tax on consumption of goods and services where only value addition will be taxed and burden of tax is to be borne by the final consumer.
Another benefit that has been introduced is the exemption of GST for certain industries and products such as dairy products, products of mining industries, fresh vegetables and fruits, meat products and grocery items.
We can say that the new taxation structure introduced by the Government in the form of GST is to simplify the current indirect system and a strategy leading to higher output, more employment opportunities, and economic boom in India in a long run.