There's no denying that yield from indirect taxes is the bedrock of government's revenue.
Indirect taxation consists of all those taxes which are indirectly collected form the consumers on the consumption of goods and services by union and state government through intermediaries at different stages.
In the case of indirect tax, the liabilities of the tax can be passed on to someone else. This means that when the whole seller pays VAT on his sale, he can pass on the liabilities to retailer and when retailer pays the tax, he can pass on the liability to customer. So, in effect, customer pays the price of the item as well as the VAT out various levels on it. This whole system leads to double taxation. This system directly hits the final consumer who has to bear the whole burden and this burden is largely bore by the poor people who spend a major portion of their income on the consumption of goods. To make the consumer somewhat free and to release them from the load of all taxes, the govt. of India has preluded the concept of GST, i.e. Goods and Services Tax. GST has been launched as the One hundred and first Amendment of Indian Constitution at the midnight of June 30- July 1, 2017 applicable to the whole of India. Central Hall of Parliament became the witness of the Mega launch of GST rolled out by the President and Prime Minister of India.
Applauded and Glorified by the Government, GST came into existence as the most awaited and conscientious tax rejuvenation post 17 years of hectic arguments (since 2000 when it was first proposed) among the center and the states. Being an indirect tax, GST is going to replace the plethora of all indirect taxes which were previously imposed by Union and State Governments. GST is the landmark amendment in the history of Indian taxation System. Since Independence and the amendment is expected to bump up GDP by a percentage point or even more.
Cascading Effect: Issues of Present multistaged Tax System
This story is from the November 2017 edition of BANKING FINANCE.
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This story is from the November 2017 edition of BANKING FINANCE.
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