What do we mean by Goods & Services Tax (GST)?
Taxes refer to the charges that are levied on all the goods and services that we buy or sell. Taxes are paid by the individuals to the government that is spent on the expenditures related to the country’s development. So, after the Demonetization was done in India during 2016, the introduction of the Goods and services tax under the leadership of Narendra Modi (the current Prime Minister of India as of 2020) led to further strengthening of the Indian Economy. Today, we will understand its meaning in detail. Let’s learn.
Goods and Services Tax (GST)
Goods and Services Tax is a destination-based single tax on the supply of goods and services from the manufacturer to the consumer. A single tax collection from the manufacturer to the consumer to remove multiple indirect taxes levied by the Central and State government. Remember, GST is an indirect tax. Taxes like Value added tax have been removed after the implementation of GST.
What are the objectives of GST?
- To ensure the smooth flow of goods and services across the country.
- The reduction in the prices of the commodities to benefit the consumers.
- To improve tax compliance and making the tracking of the tax system easy.
- To ensure greater tax transparency by removing multiple indirect taxes.
What are the advantages of GST?
- Goods and Services Tax helps to create a unified common national market for India, and improved foreign investments.
- Simplified tax system with fewer exemptions.
- Removal of many indirect taxes.
- It helps in the reduction of the prices of commodities in the long run with the help of a simplified tax structure.
What are the disadvantages of GST?
- Some enterprises are still not aware of the GST system.
- This tax is complex to understand and required professional assistance.
- It requires the purchase of new software by businesses and causes higher operational costs.
I hope it was helpful. Refer to this presentation for more topics like above and subscribe to get articles directly in your mailbox.