Introduction of GST in India

Goods and Services Tax (GST) is an indirect tax that was introduced in India on 1st July 2017. GST is a single tax that has replaced various indirect taxes that were levied by the Central and State Governments. The introduction of GST is considered to be one of the biggest tax reforms in the history of independent India. The GST system has brought transparency and simplicity in the tax structure of India.

Laws governing GST in India:

The GST system is governed by various laws that have been passed by the Parliament of India. The following are the laws governing GST in India:

• The Constitution (One Hundred and First Amendment) Act, 2016: This amendment to the Constitution of India paved the way for the introduction of GST in India. The amendment empowered both the Central and State Governments to levy and collect GST on the supply of goods and services.
• Central Goods and Services Tax Act, 2017 (CGST Act): This law provides for the levy and collection of taxes by the Central Government on the supply of goods and services within the country. The CGST Act also provides for the registration of taxpayers, the filing of returns, and the administration of the tax.
• State Goods and Services Tax Act, 2017 (SGST Act): This law provides for the levy and collection of taxes by the State Governments on the supply of goods and services within their respective states. The SGST Act also provides for the registration of taxpayers, the filing of returns, and the administration of the tax.
• Integrated Goods and Services Tax Act, 2017 (IGST Act): This law provides for the levy and collection of taxes by the Central Government on the supply of goods and services between different states or union territories. The IGST Act also provides for the registration of taxpayers, the filing of returns, and the administration of the tax.
• Union Territory Goods and Services Tax Act, 2017 (UTGST Act): This law provides for the levy and collection of taxes by the Union Territory Governments on the supply of goods and services within their respective territories. The UTGST Act also provides for the registration of taxpayers, the filing of returns, and the administration of the tax.
• Goods and Services Tax (Compensation to States) Act, 2017: This law provides for the payment of compensation to the State Governments for the loss of revenue due to the implementation of GST for a period of five years.

Advantages of GST:

• Simplified Taxation: GST has simplified the tax structure in India by replacing various indirect taxes with a single tax.
• Transparency: GST has made the tax system more transparent by bringing more taxpayers under the tax net.
• Elimination of Cascading Effect: GST has eliminated the cascading effect of taxes, where taxes were levied on taxes.
• Improved Compliance: GST has improved the compliance of taxpayers by making the tax system more streamlined and easy to understand.
• Boost to the Economy: GST has given a boost to the Indian economy by increasing the ease of doing business in India.

According to the official data released by the Ministry of Finance, the GST collection in India for the financial year 2020-21, i.e., April 2020 to March 2021, was as follows:

The total GST collection for the financial year 2020-21 was INR 13,71,242 crore, which was a decline of 8.2% as compared to the previous year. The decline in GST collection was attributed to the economic slowdown caused by the COVID-19 pandemic and the various lockdown measures that were implemented to contain its spread. However, the GST collection showed a steady increase in the later part of the year, which indicates a gradual recovery in the economy.