Goods And Services Tax

It is a destination based tax and perhaps the largest tax reform in india. It has subsumed all other taxes like VAT, central excise duty and others. It is implemented in India on 1 July 2017. It is there in many countries. It is divided into four parts:-

1. state GST

2. Central GST

3. union territory GST

4. integrated GST

but it has some advantages and disadvantages at the same time they are:- it has reduced the layers of taxes that existed for a long time. Some economists say that it is just other name for different taxes and in reality the tax layers has not reduced.

it is beneficial to the consumers as well as sellers as now they have full knowledge about the products. But at the same time it is difficult for many to shift to this kind of tax system. Moreover, it is a transparent tax and also reduce number of indirect taxes. GST is not a cost to registered retailers therefore, there will be no hidden taxes and the cost of doing business will be lower. When all the taxes are integrated, it would make possible the burden of taxation to be split between manufacturing and services.

the disadvantages are that it has raised the prices of some of the commodities and as a result of this the demand for goods has reduced because sellers now charge more money on their goods as they now have to pay more as tax. Cosmetics, clothes and garments have become more expensive since the implementation of GST. It has added up to 8% to the cost of new homes and reduced demand by about 12%.

there are others also sources of governors revenue excluding GST. It is divided into two parts- tax revenue and non- tax revenue.

where tab revenue includes union excise duties, customs, income tax, corporation tax, wealth tax, gift tax, capital gains, tax on foreign travel. They are now replaced and together known as GST. Whereas the non-tax revenues are interest receipts, surplus profits, currency, coinage and mint, railways and profits of public enterprises.