Advocate Keshav Maheshwari
Goods and Service Tax and changes in development of country after it’s effectuation
Introduction:
Prior to the enactment of Goods and Service Act (GST). The Tax Payer had to register with various tax departments and had to pay different types of taxes and duties for different tax tiers to different tax authorities under different regimes implemented by the Ministry of Finance, which ultimately leads to major part of their profits/income being paid to the Finance Government in terms of taxes, fines, penalties etc. The tax system earlier to the effect of GST enactment was lengthy, tiresome and complicated for the layman doing business, reason for having hard and complicated tax system, that has been easy after the GST effectuation after getting approval and consent from both the parliament and it enacted into effect from 01.07.2024. Thereafter GST had been made effect to within the tax structure. The GST had introduced four tier system under the aegis and domain of Ministry GST Council that comprise in three legislations are as further Central Goods and Service Tax (CGST), State Goods and Service Tax (SGST) and Inter Goods and Service Tax (IGST), the scope and significance of the GST, CGST, IGST and SGST have been explained further.
Complications faced by Tax Payer and changes which GST bought with it’s implementation:
Tax and duties levied by the Central and State government on the Tax Payers for the purpose of retaining enough funds for smooth transition of Government through funds paid to VAT Department, Service Tax Department, Central Sales Tax Department amongst others. Therefore, due to the aggressive and manipulative taxing system, prior to the GST enactment, the tax payers find the obligations and liabilities of paying the taxes, unmeaningful, unaffordable and burdensome to conclude.
It is to be valuable enough to mention that prior to the GST the taxes were not elucidating, more than ten taxes have been abolished after the effectuation of GST making convenient and reliable for the tax payers to pay only one commercial tax i.e. GST more specifically for the business persons making the tax structure more hassle free and time saving as the tax payer paying the commercial tax to the GST portal instead of paying different taxes to different departments. The various mechanisms where tax payer gets agonized via paying taxes to different authorities and departments including taxes such as vat, service tax etc, had now been reduced after enactment of GST Act.
Role of the Government in implementing GST and convenience to the Tax Payers:
The Government had played main and pivotal role and had born painstaking obligations and compromises in implementing GST. The government had constructed a four tier system that prima-facie consists of slabs taxed as 5%, 12%, 18% and 28%. The four tier structure comes with certain advantages and disadvantages also. Further, the main and foremost role of bringing GST into effect is to reduce the burden of the government more specifically the finance government in evasion and avoidance of tax, inconvenience faced by the tax payers in filing numerous returns to numerous tax departments, transparency in tax structure and reduce in burden of tax payers in filing tax before department now consolidated to GST divided amongst CGST, IGST and SGST.
Further in brief the CGST, IGST and SGST has been distinguished below:
1) CGST: Central Goods and Service Tax is established within the ambit of GST council to pay the tax to the GST tax to the Central Government. The CGST is levied upon the tax payer at the stage when the Goods and Services are provided to the State Government as well as to the Inter State Government. CGST can varies as per the tier depending on the Goods and Services. CGST is levied by the Central Government.
2) SGST: Central Goods and Service Tax is established within the ambit of GST council to pay the tax to the GST tax to the central government. The CGST is levied upon the tax payer at the stage when the Goods and Services are given to the other authority or would be simplified to state it as within the State. SGST is levied by the State Government.
3) IGST: Inter Goods and Service Tax is established within the ambit of GST council to pay the tax to the GST tax to the Central Government as well as the State Government. The IGST is levied upon the tax payer by the Central as well as the State Government. The CGST is levied at the stage when the Goods and Services are provided from the one State to another State. IGST can varies as per the tier depending on the Goods and Services. IGST is paid by the receiving person and collected by the provider.
Reasons to implement GST by the Government and it’s benefits:
GST was a milestone for the Government more specifically for the Finance Government for availing GST tax from the assessee falling under the scheme of GST Tax slabs. Further, even the consumers also pay GST respective to the Goods purchased which ultimately is accounted to the government. GST charged by the government is applied/invested for development of economy, technology, industries and infrastructure of the Country. Further, GST is also implemented to curb the black money which is earned by the certain persons/authorities through illegal means and for other reasons also GST had been introduced into effect amongst the abovesaid reasons. GST had been a major department in preventing the progress and increment of black money as the GST authority had bought several measures to curb and track the authorities making application of illegal earned money and had been able to prevent and restrain use of money earned through illegal sources and either evaded to pay to government
Conclusion:
Tax system earlier to the effect of GST enactment was lengthy, tiresome and complicated for the layman doing business, reason for having hard and complicated tax system, that has been easy after the effectuation of GST. Government vision to implement GST is to reduce the burden of the government more specifically the finance government in evasion and avoidance of tax, inconvenience faced by the tax payers in filing numerous returns to numerous tax departments, transparency in tax structure and curb and track the application of illegal earned money for preventing and restraining the use of money earned through illegal sources and either evaded to pay to government which had been achieved to a greater extent. Further, modifications are still required in terms of reducing the tax slabs, immuning the tax payers from paying heavy penalties and litigation could assuredly lead to much more better development.
