The Details of GST Tax India

GST is an indirect tax in India, which has replaced many other indirect taxes. The GST tax India was passed in the parliament on 29th March 2017 and the act came into force on 1st July 2017. The Goods and Services Tax law of India is comprehensive, multi-staged and destination based. In other words, GTS is an indirect tax which is there on every supply of goods and services. This particular law has replaced every other indirect tax law which has previously existed in India.

GST is one indirect tax which is for the entire country. Under it, the tax will be there at every point of sale. Interstate sales taxes will be apt as integrated GST. The journey of GST began in the year 2000 when a committee was set up to draft an indirect tax law. It took almost 17 years for the law to evolve. All registered business has to file GST return online monthly, quarterly or annually depending on the type of business.

Why is the GST is Destination based? Suppose if some goods are in West Bengal and are sold to the final costumer in Tamil Nadu, since GST is there only at the point of consumption, in this case, it is Tamil Nadu, and the entire tax revenue will go to the Tamil Nadu government and not West Bengal government.

A GST returns online is a document that contains details of income which a taxpayer should file with the tax filing authorities. This is vital for the tax authorities to calculate the tax liability. Under the GST, a professionally registered dealer has to file the GST return which includes, purchase, sales, output GST and the input tax credit i.e. GST paid on purchases. To file a GST return, a GST compliant purchase and sales invoices are necessary. 

Advantages of GST in India

One tax system- instead of paying several taxes which are there in the state and the central government, GST proposes to impose only one indirect tax. GST will replace several hidden taxes that are there at the state and central governments. This will definitely improve the business.

The decrease in price of commodities- GST has the charge at the manufacturing time and collected at the point of sale; this means that the price will come down which in return will benefit the consumer. Once the price goes down, the purchasing power of the consumers will increase, hence it will benefit the company.

Product identification- under the earlier regime, the classification of commodities into different categories caused a lot of confusion and was a litigious issue. GST aims to solve the issue by bringing in HSN or Harmonized System of Nomenclature. It is actually an 8 digit code used to identify commodities according to international standards.

Eliminating extra taxes- earlier several taxes are on the same product hence increasing the price of the product. With the passing of GST, it has eliminated the tax on tax effect.