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Goods and service tax system completes four year : See details and key points
The Goods and Service Tax system, the countries biggest tax reform, completed four years on 1st July 2021.
The government has decided to honour the tax payers who have been a part of its success story.
- The Goods and Service Tax Act was passed in the Parliament on 29th March 2017 and came into effect on 1st July 2017.
- Over the years, GST rates were reduced on 400 goods and 80 services.
- GST is a single domestic indirect tax law for the entire country.
- GST has been a milestone in the economic landscape of India.
Advantages of GST
- GST also removed a tax arbitrage across states that distorted business investment decisions.
- GST has mainly removed the cascading effect on the sale of goods and services, leading decrease in cost of goods.
- It has decreased the number of taxes, compliance burden and overall tax burden on common man making the tax system transparent and easy.
- This makes our tax system easy and accessible. As it is mainly technologically driven.
- All the activities like registration, return filing, application for refund and response to notice needs to be done online on the GST portal, which accelerates the processes.
What are the components of GST?
There are three taxes applicable under this system: CGST, SGST & IGST.
- CGST: It is the tax collected by the Central Government on an intra-state sale (e.g., a transaction happening within Maharashtra)
- SGST: It is the tax collected by the state government on an intra-state sale (e.g., a transaction happening within Maharashtra)
- IGST: It is a tax collected by the Central Government for an inter-state sale (e.g., Maharashtra to Tamil Nadu)
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