Essay on GST in English

GST, Goods and Services Tax, is an indirect tax levied on goods and services produced, manufactured and sold in India. By indirect, it means the government collects it from the sellers or businesses and not from consumers. Consumers pay GST on the products and services bought from the seller. On this page, we will discuss some sample essay on GST, its meaning, benefits and other dimensions.

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Essay on GST in 100 words

‘GST, Goods and Services Tax, is a tax system in India introduced on July 1, 2017, to simplify the tax structure. Before GST, there were multiple taxes at both national and state levels. The main idea was to make taxation more straightforward, encourage business, and eliminate redundant taxes.’

‘GST is divided into five types of tax rates: 0%, 5%, 12%, 18%, and 28%. Luxury goods like SUVs and sedan cars, houses, casinos, etc. have the highest GST rate; 28%. The tax is applied based on where the goods or services are consumed, making it a destination-based tax. Overall, GST has made the tax process transparent and more efficient in India.’

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Essay on GST in 200 words

”GST stands for ‘Goods and Services Tax’. It is a uniform indirect tax levied on the ‘supply’ of goods or services and not on the manufacture of goods on the sale of goods or provision of services. India borrowed its GST model from the Canadian Dual GST model.’

Under GST, goods and services are divided into five tax slabs: 0%, 5%, 12%, 18% and 28%. Products and services like dry and fresh vegetables, unroasted coffee beans and green tea leaves, raw silk, khadi fibre, etc. are all exempted from GST. Products like petroleum, electricity and alcohol drinks follow the old taxation system, with separate central and state taxes.’

How GST Works?

‘GST is based on the principle of destination-based consumption taxation, rather than the present principle of origin-based taxation. Under GST, all the suppliers, manufacturers, wholesalers and retailers have to register their good and services. Wholesalers and retailers are the intermediaries through which the government collect taxes. The government collects indirect tax from customers, who buy products and services from retailers and wholesalers. The ultimate burden of GST falls on customers.

‘GST has made the taxation process more transparent and efficient than ever. Previous taxes, like services tax, central excise tax, state-level VAT, and additional customs duty have fallen under GST.’

‘GST certainly subsumed several taxes and levies. These include central excise duty, services tax, and additional customs duty. Furthermore, state-level VAT, surcharges, and Octroi also come under GST. The GST system has eliminated previous levies, particularly those related to inter-state transportation of goods. Notably, GST is now applicable to a wide range of transactions, including sales, purchases, transfers, leases, and imports.’

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Essay on GST in 600 words

The full form of GST is “Goods and Services Tax”. GST is a uniform tax that is levied on the supply of goods and services by the government of India. GST, as an indirect tax, has replaced all the other state as well as central indirect taxes. It has brought the whole of India under a single tax regime, hence resulting in saving time and a low burden of tax. 

Types of GST

GST has been divided into four types. These types are:

1. C-GST (Cental-GST)

• It is levied on the transaction of goods and services by the Central Government of India with a state of Union Territory. CGST has replaced central taxes such as Central Excise Duty, Customs Duty, Central Sales tax, and SAD i.e. Special Additional Duty Tax.

2. S-GST (State- GST)

• This GST is levied by the State Government on the transactions of goods and services within the state. It is the tax that is levied within a state, other than CGST. the taxes that SGTS replaces include:- Luxury Tax, Entry Tax, Value Added Tax, Entertainment Tax, etc. 

3. I-GST (Integrated Goods and Services Tax)

• The IGST is levied on the transaction of the goods and services that are interstate i.e. between two or more states, unlike CGST and SGTS which are levied in an intrastate manner. IGST is collected by the central government and then reimbursed later by the respective state.

4. UT-GST (Union Territories – GST) 

• This GST is imposed on the transaction of goods and services in the ahead mentioned 5 union territories of Idia:- Daman and Diu, Dadar and Nagar Haveli, Andaman and Nicobar Islands, Chandigarh, and Lakshadweep. The GST on the union territories is the total of the UTGST and the CGST.  SGST does not apply to UTs as it would involve the Legislature. UTs of Delhi and Pondicherry rather have SGST as they have they have their own Legislature.

Benefits of GST

GST has eliminated the cascading tax effect; tax on tax.

• GST will help to establish a Unified Common Market, which will provide a significant boost to foreign investment and the “Make in India” initiative.
• GST will boost export and manufacturing activity. There will be employment opportunities, which will lead to substantive economic growth and poverty eradication.
• It has made the tax regime more simpler.
• Businesses can easily flourish under tax guidelines.
• Elimination of double taxation on various sectors.
• Efficient neutralisation of taxes, especially on exports.
• It will help in making prices transparent as the
• The transparency in the seamless flow of input tax credit between manufacturers, retailers, and service providers is anticipated to result in a clear and transparent final price for goods.
• Reduction in the prices of services and products in the long run.

Challenges of GST

Although GST has several advantages to the government, manufacturers, wholesalers, retailers and ultimately consumers, there are certain challenges also.

• CGST and SGST input credits cannot be cross-utilised.
• Manufacturing states experience substantial revenue loss on a larger scale.
• A higher tax rate is imposed to compensate for the revenue previously collected from various taxes, resulting in a high Revenue Neutral Rate.
• There is a decrease in the fiscal autonomy of the states.
• Banks and insurance companies express concerns about the necessity for multiple registrations under GST.
• An additional cess is levied.
• The ability of State tax authorities, accustomed to taxing goods rather than services, to handle the latter is uncertain.
• The effectiveness of GST relies on political consensus, technological integration, and the capability of tax officials to adjust to new requirements.

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Conclusion

The main purpose of GST is to treat India as one big market and imply one uniform tax regime. GST has had many effects such as reducing the unnecessary tax burden of different states and central taxes, making goods cheaper for both, the stakeholders as well as the consumers. 

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