New Delhi: The Goods and Service Tax (GST) regime completes 3 years today (July 1, 2020). GST was launched on the 1st July, 2017 in a majestic ceremony held in the Central Hall of Parliament on the midnight of 30th June, 2017.
The introduction of GST is a game changer for Indian economy as it has replaced multi-layered, complex indirect tax structure with a simple, transparent and technology–driven tax regime. It has integrated India into a single, common market by breaking barriers to inter-State trade and commerce. GST aims to eliminate cascading of taxes and reduce transaction costs.
Here are some advantages of the Goods and Service Tax:
Simplified Tax Structure: Reduction in cascading effect of taxes, transparent and has harmonisation of laws and procedures.
Easy Compliance: compliance burden has come down with one pan-India tax replacing multiple taxes and automated processes.
Promoting Trade and Industry: Seamless flow of tax credit.
Spurring Economic Growth: Creation of unified common national market.
India has adopted dual GST model because of its unique federal nature. Under this model, tax is levied concurrently by the Centre as well as the States on a common base, i.e. supply of goods or services or both. GST to be levied by the Centre is called Central GST (Central tax / CGST) and that to be levied by the States is called State GST (State Tax / SGST).
CGST & SGST / UTGST is levied on all taxable intra-State supplies. Inter-State supply of goods or services subjected to Integrated GST (Integrated tax / IGST).
The IGST model is a unique contribution of India in the field of VAT. The IGST Model envisages that Centre would levy IGST (Integrated Goods and Service Tax) which would be CGST plus SGST on all inter-State supply of goods or services or both.