GST
- ECONOMY
News: GST revenue growth slowed to 10.2%
in September
What's
in the news?
●
Growth in India’s gross Goods and Services
Tax (GST) revenues slowed to a 27-month low of 10.2% in September, from around
10.8% in the previous two months. However, collections improved 2.3% over
August revenues to touch ₹1,62,712 crore.
Key
takeaways:
●
Revenues from domestic transactions,
including services imports, were 14% higher than the tax collected from these
sources during September 2022.
●
This is the fourth time that the gross GST
kitty has crossed the ₹1.60 lakh crore mark in 2023-24, the Finance Ministry
said.
Goods
and Services Tax (GST):
●
It is an indirect tax (not directly paid
by customers to the government) that came into effect on July 1, 2017, as a
result of the 101st Amendment to the
Indian Constitution.
Objective
of GST:
●
To simplify the tax system by substituting
a single indirect tax for several
indirect levies.
●
Eliminating
tax cascading by establishing a uniform tax structure.
Features
of GST:
●
It is applicable on ‘supply’ of goods or
services as against the present concept on the manufacture of goods or on sale
of goods or on provision of services.
●
It is based on the principle of destination-based consumption taxation
as against the present principal of origin-based taxation.
●
It is a dual GST with the Centre and the States simultaneously levying tax
on a common base.
●
The GST to be levied by the Centre would
be called Central GST (CGST) and
that to be levied by the States would be called State GST (SGST).
●
An Integrated
GST (IGST) would be levied an inter-state supply (including stock
transfers) of goods or services.
●
GST is being levied at four rates viz. 5%, 12%, 18% and 28%.
●
The GST would apply to all goods other
than alcoholic liquor for human consumption and five petroleum products, viz.
petroleum crude, motor spirit (petrol), high speed diesel, natural gas and
aviation turbine fuel.
●
The GST
Council headed by the Union Finance Minister is the governing and key
decision-making body for GST.
Components
of GST:
1.
CGST:
●
It is the tax collected by the Central
Government on an intra-state sale (e.g., a transaction happening within
Maharashtra).
2.
SGST:
●
It is the tax collected by the state
government on an intra-state sale (e.g., a transaction happening within
Maharashtra).
3.
IGST:
●
It is a tax collected by the Central
Government for an inter-state sale (e.g., Maharashtra to Tamil Nadu).
Advantages
of GST:
●
GST has mainly removed the cascading effect on the sale of goods and services.
○
Removal of the cascading effect has impacted the cost of goods.
○
Since the GST regime eliminates the tax on
tax, the cost of goods decreases.
●
GST is mainly technologically driven.
○
All the activities like registration,
return filing, application for refund and response to notice needs to be done
online on the GST portal, which
accelerates the processes.
Issues
with GST:
●
High
operational cost.
●
GST has given rise to complexity for many
business owners across the nation.
●
GST has received criticism for being
called a 'Disability Tax' as it now taxes articles such as braille paper,
wheelchairs, hearing aid etc.
●
Petrol is not under GST, which goes
against the ideals of the unification of commodities.