The Goods and Services Tax or GST has at last been rolled out across the country. It was launched on 1 July, 2017. GST promises to revolutionize the way we pay our taxes and reform the current tax structure.
The GST is a comprehensive, multi-stage, destination-based tax that will be levied on every value addition. Global ratings agency Moody’s has said that the GST regime will only work wonders on the credit profile of India and contribute towards growth in the GDP as well as help in productivity as it will accelerate new business ventures. The improved tax compliance will also contribute to higher government revenue which in return will help in the development of India. The global rating agency has given India a “Baa3” rating with a positive outlook.
According to Moody’s Investors Service, implementation of the GST will be positive for India’s rating as it will lead to higher gross domestic product (GDP) growth and increased tax revenues in the following ways:
- The ease of doing business in India will be improved.
- The entire national market unified under one tax structure will seem more conducive to the foreign investors.
- Under the GST regime, the tax compliance will improve India’s credit profile as well as support higher government revenue generation.
- Even a reduction in the overall cost of compliance from simplified tax rates will be seen.
- Tax credits will be incentivised in the GST system.
- Once the plethora of taxes like excise, service tax and VAT are out of the way, the movement of goods and services alike will be seamless.
- Under the new regime, the tax structure is very simple and user-friendly with 5%, 12%, 18% and 28% levied on various goods and services while 0% GST will be charged on certain essential items like healthcare services, salt, and unpacked food grains, etc.
- For all the consumers worried about the levy of GST, this new regime will in fact help because while earlier the shopkeeper recovered the amount paid in the various forms of tax by passing on the liability to the customer, now the system of Input Tax Credit will allow sellers to claim the tax already paid. Thus the liability of the consumer will only decrease.
This is indeed one of the biggest tax reforms that the country has seen since independence. While France was the world’s first country to implement GST Law in the year 1954, 159 other countries have also adopted the GST Law in some form or other. India also joins now and according to the US-based agency Moody’s Investors Service this only will mean further progress of the economy of the country.
Read More About GST
What is GST?
How to register for GST?
Various Goods and Services Tax forms
GST Rule Changes
Implementation of the GST in India
Costlier Or Cheaper Under GST?
Revised GST Rate List
Different GST Return Forms