Shreya Shrivastava|Symbiosis Law School, Hyderabad| 10th June 2020

Introduction

Indirect taxes are imposed on the retailer or producer who is an intermediary in the supply chain. But it is recovered by them from the final taxpayer or consumer as a purchase price of goods and services, creating a difference between the point of impact of these taxes and the point of incidence. Unlike a direct tax, indirect tax is levied at the expense of the person and not on his income. Indirect tax is governed by four tax mentioned under GST later.

Goods and Services Tax (GST)

Before 1^st July 2017, through various Central indirect taxes like central sales tax, central excise duty, etc, various State indirect taxes like entertainment tax, VAT, luxury tax, etc. the taxes were levied. Under the Goods and Services Act, the GST is the replacement of many state and central taxes as a value-added indirect tax which has to levied at every single point of the sale on every commodities and service which are sold for the domestic consumption throughout the country,  except alcoholic drinks, petroleum products, and electricity. By avoiding paying tax on tax the implementation of GST has reduced the individual prices of commodities and eliminating double taxation or cascading effect of the previous tax system. It is comprehensive:

• Multi-stage- every stage of monetary addition.
• Destination based- collected from the consumption point and not from the origin.
• Technologically driven- all GST activities.

GST Legislations

The possibility of a solitary Goods and Services Tax (GST) for the whole country was first considered and endorsed in 1999 under Prime Minister Atal Bihari Vajpayee, who at that point set up a board of trustees headed by Asim Dasgupta to plan a GST model and a team under Vijay Kelkar in 2002 to suggest charge changes, which in 2005, suggested turning out GST. After a long and laborious excursion, The Constitution (One Hundred and First Amendment) Act, 2016 was passed by the two Houses and endorsed by the President of India in 2016, making ready for the usage of GST. The Constitutional Amendment presented the accompanying primary highlights:

1. empowered the Parliament with the select option to cause laws concerning To GST in regards to between State exchange or trade and engaged the Parliament and State Legislatures with the “simultaneous forces” to cause laws as for to GST forced by the Union or by the separate state (Article 246 (A)).
2. GST if there should arise an occurrence of the between state exchange will be imposed and gathered by the Government of India and shared between the Union and State Governments according to the proposal of the GST Council and such expense income got by the Union or states would not be credited to the Consolidated Fund of India and the standards for between State exchange or trade can be planned by the Parliament (Article 269A).
3. Provided for constitution of a GST chamber by the President of India inside sixty days by recommending:
4. the individuals from the Council (the Union Finance Minister (the Chairman of the Council), the Minister of State (Revenue) and the State Finance/Taxation Ministers),
5. the procedure of making choices through democratic, and
6. the specifications it can suggest including:
7. the charges, cesses and overcharges subsumed in the GST,
8. goods and administrations to be exposed to, or absolved from GST,
9. Model Goods and Services Tax Laws,
10. principles of toll and rules that oversee the spot of gracefully,
11. apportionment of Integrated Goods and Services Tax between the Union and States,
12. the edge breaking point of turnover beneath which GST might be excluded,
13. rates incorporating floor rates with groups of GST and any extraordinary rate or rates to raise extra assets for a predetermined period during any characteristic catastrophe or debacle,
14. special arrangement regarding a few States and Union Territories, and
15. any other issue identifying with GST, as the Council may choose (Article 279-A).
16. Prescribed the merchandise and items like tobacco, liquor and oil which are excluded from the ambit of GST and are under the ward of the Union Government (seventh Schedule, Union List, State List).

Along these lines, the accompanying four advantageous GST enactments were passed by the Houses:

• Central Goods and Services Tax Act 2017,
• Integrated Goods and Services Tax Act 2017,
• Union Territory Goods and Services Tax Act 2017, and
• Goods and Services Tax (Compensation to the States) Act 2017.

The State Legislatures of various States passed their own individual State Goods and Services Tax Bills. Such isolated enactments for the Union and the states are required because the GST framework embraced in India follows a double structure, which implies that the states demand its very own GST notwithstanding the focal GST charged by the Union, instead of the Union gathering the entire assessment and dispersing it to the states. Under the double GST structure in India, there are 3 primary relevant assessments:

1. CGST: imposed by the Union on an intra-state deal (when the deal and utilization are in a similar state);
2. SGST: imposed by the State Government notwithstanding CGST on an intra-state deal; and
3. IGST: imposed by the Union on a between state deal (when the purpose of cause and purpose of utilization of items are in two distinct states).

Conclusion

System of GST has been a game-changer tax system introduced in India, even with a few hitches and disadvantages. The prices of commodities are reduced, due to ease of registration it is easier to start the business, there are many businesses which have to pay less tax and are exempted from paying of the tax and compliance has become easier. Through the introduction of GST, it has been boon in attracting foreign investment and has increased the ease of business. This shows that GST is the friendlier policy for consumers, businesses, and tax authorities. Simple two-rate GST structure is required with low rates for raw materials/inputs and for finished products higher rates are required, which would eliminate any structure duty for the business. Gas, oil, and electricity and other chunks of the economy do not come under the ambit of GST, the retainment of cascading effect due to levy of VAT, excise duty, etc. which instead adds to the overall commodities. These all should be brought under a common statute of tax to gain complete benefit of GST in India.