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101st Constitutional Amendment Act introduced the GST in 2017.
- GST is a comprehensive indirect tax levied on the supply of goods and services.
- It is a value-added tax (VAT).
Key Features of GST
- One Nation, One Tax: Replaced multiple indirect taxes levied by the Central and State Governments, such as excise duty, service tax, etc.
- Dual Structure: Comprises of the Central GST (CGST) and the State GST (SGST).
- In the case of Inter-state transactions, Integrated GST (IGST) is applicable, which is collected by the Central Government and apportioned to the respective State.
- Destination-based Tax: GST is a destination-based tax, levied at each stage of the supply chain.
- Tax Slabs: 0%, 5%, 12%, 18%, and 28%.
- Governance: GST Council is key decision making body.
- Goods and Services Tax Network (GSTN) provides IT system of the GST portal.
Key Achievements
- Rise in number of GST taxpayers (grew from 1.05 crore (April 2018) to 1.46 crore (April 2024))
- Eliminated the cascading effect of taxes.
- Reduced compliance burden for small taxpayers (e.g composition scheme).
- Increased intrastate and interstate transactions by electronic way (e-way) bills
Key Challenges/Concern and Potential SolutionsChallenges/Concern
Potential Solutions
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