GST IN INDIA: A KEY ECONOMIC REFORM

Abstract

This study provides an overview of India's historical GST and pre-GST tax structures. India's most significant tax reform is finally in place, based on the concept of "one nation, one market, and one tax. The Goods and Services Tax (GST) replaced several indirect taxes such as excise duty, service tax, supplementary customs duty, surcharge, state level value added tax and octroi which were levied on various goods. After more than two decades of debate, Prime Minister and Finance Minister of India sh. Narendra Modi and Arun Jaitley respectively, have passed the GST Bill, which will go into effect on July 1, 2017. GST has helped a lot to remove double taxation or tax cascading effect. The GST regime includes four taxation rates: 5 percent, 12 percent, 18 percent and 28 percent. Certain products and services are tax-free. Manufacturing and exports are expected to benefit under the GST regime. This will result in more employment and economic prosperity in India.