The implementation of the GST in India was a revolutionary change in the taxation structure of India as it rigorously eliminated several taxes levied in sequence. This progressive change made tax and indirect tax easy to follow and get rid of and confusing tax system. How GST has evolved in India from its inception to its current form, this blog will walk you through.
Narendra Modi has provided the idea for GST during the UPA government term but he made the foundation for rolling it out.
Evolution of Tax Rates and GST
At the start, the GST Council recommended that there be four tax rates, which include 5%, 12%, 18% and 28% as well as a Cess on luxury and sins goods. They have later been further sub divided for most goods and services to 5% and 12% with only limited items being standardized at the higher 18% and 28% tax rates.
GST and Technological Developments
It also set up an IT structure for filing the returns in a manner that firms can link PAN with GSTIN to enable efficient transactions. Through such application of technology in the nations’ tax systems, these nations have been able to make their tax system more efficient and transparent.
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Impact on India’s Economy
GST has brought changes at a very large scale in the economy of India. They have seen to lessen general taxes for products and services, improved compliance and eased cross state commerce. It has enhanced economic growth and has linked the country’s markets to the extent of promoting fair competition and more to reducing tax evasion.
Limitations and Modifications
However, this move has occasioned the following challenges: complex tax rules; need for more GST message to the taxpayers; as well as initial hitches in the GST IT system. The government has, however, been changing aspects such as rates, the deadlines for filing returns, and assistance to small businesses affected by COVID-19.
GST in the Post-Pandemic World
From the above analysis, it has been evident that the pandemic has proven the importance of GST for economic revival. Being the most developmental reform in taxation, GST has offered immense help in offering tax reliefs, and more importantly extending justified rates which helped in maintaining business continuity and financial stability. Thus, GST will remains as an incredible tool to boost and transform Indian economy even at the time when it is stabilizing after the downfall.
Conclusion
A historical development of GST in India point out one of the most important landmark in the taxation history of the country. This paper looks at how it has gone through iterations since its inception to accommodate various challenges and meet the economy needs. The change of the system of indirect taxes into a value added tax has created a better coherent, clear and effective system of taxation and has contributed to the development of economic integration in India. Click here for the source
