Goods and Services Tax in India

Abstract

GST is one of the most crucial tax reforms in India which has been long pending. The proposed goods and services tax is in fact the brainchild of ex-finance minister Mr. P. Chidambran. It was supposed to be implemented from April 2010, but due to political issues and conflicting interests of various stakeholders delayed. The goods and services tax is the biggest and substantial indirect tax reforms since 1947. The main idea of GST is to replace existing tax like value added tax, excise duty, service tax and sales tax. The consumer shall also be equally benefited by availing the goods and services at lower price as the cascading effect will be eliminated under proposed GST. The revenue of both central government and state government shall be increased in long run. It is expected to iron out wrinkles of existing indirect tax system and play a vital role in growth of India.The only hurdle to cross over in implementation of GST at the earliest is the disagreement of some of the state to do implement it. The goods and services is aimed at creating a single,unified market that will benefit both corporate and the economy. Several countries implemented this tax system followed by France, the first country introducing GST. India is centralized democratic and therefore the GST will be implemented parallel by the central and state government. This paper presents an overview of GST concept.