July 01, 2017 marked the beginning of Goods and Services Tax in India. People are excited as well as confused with the new tax system. We bring you a comprehensive and simple understanding of GST.
Why GST is Path Breaking and Revolutionary?
With the introduction of GST, all other direct and indirect tax will be summed up into one GST. Earlier one had to pay taxes like Central Sales Tax, State Sales Tax, Value Added Tax, Entry Tax, excise tax, Service Tax and other state controlled taxes. But now one has to only pay GST which is divided into two parts. The State GST and the Central GST where the percentage of tax levied will be divided into half.
The tax will benefit the manufacturer, wholesaler, retailer and especially the consumer. A small scale business with the turnover of 20 Lakhs will get exempted from paying any kind of tax while a business with the turnover of less than 75 lakh will have to pay under simplified scheme known as composition. In this, the business house will have to submit a simplified quarterly return and one annual return totaling 4+1= 5 returns a year.
An Ease for Transporting Goods from one State to Another
Earlier the business houses had to pay entry tax while transporting goods from one state to another and it used to create lots of chaos. It was normal to witness huge lines of trucks loaded with goods near the state border but now that has completely diminished as all these taxes are combined in one simple GST controlled by the Central Government. Rows of trucks not only created jam but also delayed delivery and sometimes goods that were sensitive got damaged. All this is history now.
GST will also end the famous Babu Raj (corruption in bureaucracy) in India. Many honest businessmen were harassed by the bureaucrats for money. Paying tax has become easier as it is all under one umbrella and is online. GST is simple and simplified version of taxation which will cover maximum businesses that will boost revenue and will benefit the consumers.
— Digital India (@_DigitalIndia) July 3, 2017