Lawyer Keshav Maheshwari

Goods and Services Tax and Changes in the Development of the Country After Its Entry into Force

Introduction:

Before the enactment of the Goods and Services Act (GST). The taxpayer had to register with various tax departments and pay different types of taxes and duties for different tax levels to different tax authorities under different schemes implemented by the Ministry of Finance, which ultimately leads to that a large part of their profits/income is paid to the Government of Finance in terms of taxes, fines, penalties, etc. The tax system before the effect of GST enactment was long, tedious and complicated for the layman doing business, which is why there was a harsh and complicated tax system, which was made easy after the coming into force of GST obtain the approval and consent of Parliament and it came into force on 01.07.2024. Subsequently, GST was integrated into the tax structure. GST has introduced a four-tier system under the aegis and domain of GST Ministerial Council which includes three legislations such as Central Goods and Services Tax (CGST), National Goods and Services Tax (SGST ) and the inter-products and services tax (IGST). , the scope and importance of GST, CGST, IGST and SGST have been explained in more detail.

Complications faced by the taxpayer and changes brought by GST with its implementation:

Taxes and duties levied by the Central and State governments on taxpayers with the aim of retaining sufficient funds for a smooth transition of government through funds paid to the VAT Department, Service Tax Department, to the central sales tax department, among others. Therefore, due to the aggressive and manipulative tax system, before the enactment of GST, taxpayers found the obligations and responsibilities of paying taxes insignificant, unaffordable and cumbersome to enter into.

It is quite interesting to mention that before GST, taxes were not clear, more than ten taxes were abolished after GST came into effect, which makes taxpayers pay only one tax commercial, that is to say the GST more specifically for taxpayers. businessmen make tax structure simpler and save time as a taxpayer paying business tax on GST portal instead of paying different taxes to different departments. The various mechanisms through which the taxpayer is distressed in paying taxes to different authorities and departments, including taxes like VAT, service tax, etc., have now been reduced after the enactment of the GST Act .

Role of Government in Implementing GST and Convenience to Taxpayers:

The government had played a leading and central role and undertaken careful obligations and compromises in the implementation of GST. The government had constructed a four-tier system which, at first glance, consists of bands taxed at 5%, 12%, 18% and 28%. The four-tier structure also has certain advantages and disadvantages. Furthermore, the main and primary role of the entry into force of GST is to reduce the burden on the government, more particularly the financial government, in terms of tax evasion and evasion, the inconveniences faced by the taxpayers during the filing numerous declarations with numerous tax services, tax transparency. to structure and reduce the burden on taxpayers in filing income tax returns before the department, now consolidated in GST divided between CGST, IGST and SGST.

More briefly, CGST, IGST and SGST have been distinguished below:

1) CGST: Central Goods and Services Tax is established under the GST council to pay GST tax to the Central Government. CGST is collected from the taxpayer at the stage when the goods and services are supplied to the state government as well as the interstate government. CGST may vary by level depending on the goods and services. CGST is levied by the State.

2) SGST: Central Goods and Services Tax is established under the GST Council to pay GST tax to the Central Government. CGST is levied on the taxpayer at the stage where the goods and services are handed over 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 services tax is established under the GST council to pay GST tax to the central government as well as the state government. IGST is collected from the taxpayer by the central government as well as the state government. CGST is levied at the stage when goods and services are supplied from one state to another state. IGST may vary by level depending on the goods and services. IGST is paid by the recipient and collected by the supplier.

Reasons to implement GST by government and its benefits:

GST was a milestone for the government, especially for the Finance government, which benefited from the GST tax among the assessees falling under the GST tax slab regime. Moreover, even consumers also pay GST relating to the goods purchased, which is ultimately charged to the government. The GST charged by the government is applied/invested for the development of the country’s economy, technology, industries and infrastructure. Furthermore, GST is also implemented to reduce the black money earned by some people/authorities through illegal means and for other reasons, GST has also been brought into force among the above-mentioned reasons. GST has played a major role in preventing the progression and increase of black money as the GST authority has taken several steps to curb and track authorities using illegally earned money and has been able to prevent and restrict the use of money earned through illegal sources. and is evaded to pay to the government

Conclusion:

The tax system before the enactment of GST was long, tedious and complicated for the layman doing business, which is why there was a harsh and complicated tax system, which was made easy after the enactment of GST. The vision of the government in implementing GST is to reduce the burden on the government, especially the financial government, in tax evasion and evasion, the inconveniences faced by taxpayers while filing many returns with many tax services, the transparency of the tax structure and the limitation and monitoring of application. of money earned illegally to prevent and restrict the use of money earned through illegal sources and be evaded to pay to the government, which had been achieved to a greater extent. Furthermore, changes are still needed in terms of reducing tax slabs, immunizing taxpayers from heavy penalties and litigation could definitely lead to much better development.