Introduction of GST, Meaning of GST and Purpose of GST

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Introduction, Meaning and Purpose of GST. In this article you can find complete details regarding Introduction, Meaning and Purpose of GST like – Complete Introduction of Goods and Service tax, Meaning of Goods and Service Tax, Purpose of Goods and Service tax. Recently we also provide Complete details for “Why GST For India – Challenges for Success in India“ and in Our Next Article we provide complete details for Expected Scheme of GST, Salient features of GST, Difference Between Present Tax Structure and GST Structure.  Now you can scroll down below and check complete details regarding Introduction, Meaning and Purpose of GST. Recently we provide complete details for GST Registration, GST Login Procedure, GST Rates 2017, GST Return Online Process, GST Refund Details, HSN Code List etc…

Introduction of GST

Introduction, Meaning and Purpose of GST

Introduction of GST

We all know that India’s tax regime relied heavily on indirect taxes. Revenue from indirect taxes was the major source of tax revenue till tax reforms were undertaken during nineties. The major case put forth for important dependence on indirect taxes was that the India’s majority of population was poor and thus widening base of direct taxes had inherent limitations.

The reference of GST was first made in the Indian Budget in 2006-07 by the then Finance Minister Mr. P. Chidambaram as a single centralized Indirect tax. The GST Constitution (One Hundred and Twenty Second Amendment) Bill, 2014 was introduced on December 19, 2014 and passed on May 6, 2015 in the Lok Sabha and yet to be passed in the Rajya Sabha

The Bill seeks to amend the Constitution to introduce Goods and Services tax vide proposed new article 246A. This article gives power to legislature of every state and Parliament to make laws with respect to goods and services tax where the supplies of goods or of services take place. Recently, Union Minister Mr. Arun Jaitley said that GST could be implemented as early as 1st July 2017.

In addition, the GST Council on 31st March 2017 approved five amended rules for the Goods and Services Tax regime and gave a “tentative” nod to the remaining four rules. Final discussion on all the 9 rules plus GST Rates would be taken up at the next meeting of GST Council scheduled on 18th-19thMay 2017.

Must Read – Role of Chartered Accountants in GST

The introduction of such a tax in Indian Economy is a concrete step of Government of India as one of the biggest taxation reforms and is all set to integrate State economies and boost overall growth. It will also help in increasing the GDP of the country by 1-1.5%. Such a tax system has already been implemented worldwide around 150 countries (France being First in 1954) and India is catching up with the global trends.

Meaning and purpose of GST

Clause 366(12A) of the Constitution Bill defines GST as “goods and services tax” means any tax on supply of goods, or services or both except taxes on the supply of the alcoholic liquor for human consumption. Further the clause 366(26A) of the Bill defines “Services” means anything other than Goods. Thus it can be said that GST is a comprehensive tax levy on manufacture, sale and consumption of goods and services at a national level. The proposed tax will be levied on all transactions involving supply of goods and services, except those which are kept out of its purview.

The two important purposes of GST are

Single Umbrella Tax Rate:

GST shall replace a number of indirect taxes being levied by Union and State Governments.

Removing Cascading Effect:

GST is intended to remove “Tax on Tax Effect” and provide for common national market for Goods and Services.

 

On our website we have provided all the details of GST Act 2017. We hope that our article will be helpful for you to understand the GST Act 2017.

 

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