The Goods and Services Tax (GST) idea was first proposed in India in the early 2000s to simplify the complex tax system
GST DAY 2023: India commemorates Goods and Services Tax (GST) Day on July 1 to honour the successful implementation of the GST regime in the country. GST, a comprehensive indirect tax, revolutionised India’s taxation system by replacing multiple complex levies imposed by both the central and state governments. With its destination-based approach, GST simplified the tax structure, ensuring transparency and efficiency.
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GST DAY: History
The Goods and Services Tax (GST) idea was first proposed in India in the early 2000s to simplify the complex tax system. The Kelkar Task Force, a dedicated team, suggested a comprehensive indirect tax system as a replacement for the existing structure that was impeding the economic growth of the country. After discussions and negotiations, the Parliament passed the Constitution (101st Amendment) Act in August 2016, giving the central government the power to levy and collect GST.
To oversee the implementation, the government formed the GST Council, comprising Finance Ministers from both central and state governments. The council held meetings to determine GST rates, exemptions, and address concerns. Finally, on July 1, 2017, GST was implemented across India, creating a unified market for seamless trade between states.
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GST DAY: Significance
GST Day is of utmost significance to India’s taxation system as it serves as a momentous occasion to celebrate the successful implementation of the GST regime. GST has brought about important changes in the Indian economy by simplifying the tax structure and creating a unified market for seamless trade between states.
The introduction of GST has replaced multiple indirect taxes, such as excise duty, service tax, and value-added tax (VAT), levied by both the central and state governments. This has made the tax system simpler and more transparent.
Another noteworthy impact of GST is the removal of barriers to inter-state trade. GST has levelled the playing field for businesses, regardless of their location within India.
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GST DAY: Interesting facts about GST
- Atal Bihari Vajpayee is known as the father of GST.
- The brand ambassador for GST is Amitabh Bachchan.
- France implemented the GST system first.
- GST exempts certain items like fresh fruits, vegetables, and unbranded flour from taxes.
- GST revenue is shared between the Central and State governments in India.
- GST was proposed in India in 2000 but took over 17 years to be implemented.
- The GST system in India has tax slabs of 0%, 5%, 12%, 18%, and 28%.
- GST eliminates the need for separate state-level tax registrations, easing business processes.
- The Canadian GST system served as the foundation for the GST system in India.
- The GST Council was established by the-then President Pranab Mukherjee in September 2016.
GST DAY: Quotes:
- The consensus we arrived with states for amending the constitution to implement GST is a major breakthrough. This alone has the potential to make India competitive and attractive for investment. – Narendra Modi
- GST will enable the move from fragmented economy to one market… it will boost investment, growth. – Arvind Subramanian
- GST is the biggest indirect tax reform India has ever seen. – Arun Jaitley
- GST is a giant leap forward for our country. – Amitabh Kant
- GST will simplify the tax regime for businesses, making it easier for them to comply with the rules. – Piyush Goyal
- GST is a much needed reset button for India’s economy. – Nandan Nilekani
- GST will bring transparency and accountability in the tax system. – Suresh Prabhu
- GST is a historic tax reform that will take India to new heights of growth and development. – Nitin Gadkari
