A lot have talked about the GST. Since its commencement, there have different kinds of points that has put forward by many great economists as well as Accountants. The Government of a country takes tax from its citizens so that it can be used to build the common infrastructure of the country forth convenience and growth of its citizens as well as of nation as a whole.
Earlier, this tax was taken from citizens in different ways and forms. It may be Excise duty, VAT/Sales tax or service tax which used to come under different jurisdiction either state or central. But under GST, the tax from citizens will be taken in just one form which they will be divided into.
- Central GST(CGST): When the supplier and buyer are from the same state then the buyer has to pay Central GST. Or in other words when there is Intra state supply of goods and services then GST is in the form of SGST and CGST. CGST goes directly to the Central government who then uses this fund for many things like developing infrastructure or giving relief fund to the natural calamity affected area.
- Integrated GST(IGST): When the supplier is from one state and the buyers from another state, then the buyer has to pay IGST. IGST has levied on import-export transactions also. When the goods and services are exchanged from SEZ then this comes under the import-export transaction and considered to be Interstate supply of goods and services.
- State GST(SGST): this tax is claimed by the state Government who then uses it to build the infrastructure of the state like hospitals, state highways, etc. This fund is used to boost the economy of the state.
Best GST software ensures that there is minimal cascading of taxes.
Benefits of GST
- Transparent and easy compliance: today we are talking about digital India. GST is built on the fact that all the taxpayers’ services will be done online. It may include registrations, returns, payments etc. GST billing software develops 100% compliant invoices and bills.
- Uniform tax rates: GST has defined slab rates for all products and services. And it ensures that it remains same and constant across the country. There will be ease of doing business anywhere in the country without worrying about different tax laws of a particular state.
- Healthy competition: there will be the dramatic reduction in the transactions costs of doing business which will create a healthy and encouraging environment for businesses to develop and grow. There will be improved competitiveness in various trades and industry.
This is the major change in a tax regime that a country like India is facing for its good and bright future. Earlier there might be some hiccups regarding the implementation of this tax system, as India is a huge country. But once the dust gets settled, GST will prove to be the boon and bane for the Indian economy. “One nation, one tax” is what we need.