ESSAY ON USE OF GST IN INDIA – ESSAY 2 (250 WORDS)

ESSAY ON USE OF GST IN INDIA – ESSAY 2 (250 WORDS)

Introduction

Goods and Services Tax in India, is a tax levied uniformly throughout India on the supply of goods and services as well as on the import of goods from foreign destinations. GST has divided particular goods and services under uniform tax slots, which initially varied from state to state. GST is an indirect Tax i.e. the dealers registered with GST act as intermediaries, collecting the tax from the end customer, which is the consumer, who ultimately bears the final burden of tax.

How GST Works

The basic mechanism of taxation under GST is that it is levied at every stage of the supply process. It is subsequently paid by the manufacturer, wholesaler, retailer and consumer. Though, the registered dealers (manufacturers, wholesalers and retailers) charge GST, they don’t keep the amount, rather pay it back to the government with a tax invoice and claim credit for the tax thus collected.

This leaves the end user i.e. the customer as the one who bears the final burden of tax. The end customer has to pay prescribed GST on the product purchased or on the services availed, without any provision of claiming the return or credit.

Conclusion

An uniform Goods and Services Tax replaces other central and state indirect taxes like – VAT (Value Added Tax), CENVAT (Central Value Added Tax),  excise tax, customs tax, state excise tax etc.  In a way, the GST has integrated the central and state taxation system into one uniform tax regime.  In a layman’s term, the manufactures and suppliers of a particular product, now have to pay a uniform tax throughout India.