ImplementaImplementation of gst is good for society improvement
Answers
GST stands for Goods and Services Tax and is proposed to be a comprehensive indirect tax levy on manufacture, sale and consumption of goods as well as services at the national level. It will replace all indirect taxes levied on goods and services by the Indian Central and State governments.
In today's world, many goods are produced in many states and consumed in many states. As these goods move from the point of origin to their final destination for consumption, many taxes have to be paid currently, as given above. The taxes are different in different states. For eg. Goods produced and consumed in the same state have a 5% VAT tax whereas goods produced in one state and consumed in another state will have CST of 2%. Same is the case in services, where there is Service tax and VAT which is levied accordingly.
Theses rates vary from 12% to 26% based on the source and destination of consumption. Under GST, it is proposed to bring a uniform tax rate, maybe 18% which will benefit producers, distributors and consumers alike.
There is expected to be huge savings for manufacturing, logistics, retail companies who inturn can pass on the benefit to consumers. There are many sectors which will benefit by GST implementation and at the same time, some sectors will face higher taxation - luxury cars, tobacco products etc are expected to be taxed at a higher rate between 27% - 40%.
But for average consumer and common man, it will bring down the cost of taxation on many goods and services. The proposal by congress is to maintain it at 18%, whereas the NDA's draft had 25%.