In India, there are two types of taxes imposed by the central and the state government. They are either direct tax or indirect tax. Direct taxes are imposed on the earnings whereas indirect taxes are applied on the expenses. The most common example of direct tax is the Income-tax. However, indirect taxes are the major revenue sources of the government. To reduce the problem of various indirect taxes. One tax system GST has come into existence.
Short and Long Paragraphs on GST (Goods and Service Tax)
Here, I’m providing some paragraphs on GST in different word limits. It will be helpful for students of all classes. Therefore, you can use these paragraphs according to your need.
Paragraph 1 – 100 Words (What is GST?)
GST or the Goods and Service Tax is a kind of indirect tax that is applied in the supply of goods. It is meant to replace various indirect taxes of India like VAT (Value Added Tax), service tax, etc. This tax is applied to goods all over India.
GST is a destination tax that will be collected from the point of consumption. However, it is imposed at every step of production but is meant to be returned to all the involved parties.
The GST Council is responsible for deciding and imposing rates on goods and services, headed by the finance minister of the country.
Paragraph 2 – 120 Words (Structure or Rates of GST)
The goods and service taxes are collected based on five different tax slabs. They are 0%, 5%, 12%, 18% and 28%. In products like expensive and precious stones, a special tax of 0.25% is applied whereas golds are kept under the 3% tax.
Some products are taxed under state government like electricity, petroleum, and alcoholic drinks hence GST is not applied to these.
However, the rates of GST are updated various times after its launch. The rates are kept high for luxurious items and goods whereas low rates are for essential goods. The GST Council on behalf of the union finance minister is responsible for revising and monitoring the rates periodically.
Paragraph 3 – 150 Words (GST Worldwide)
GST is considered as the comprehensive tax because it replaced various other taxes imposed by the state and central government. Earlier the taxes were applied on all the products The GST summed up various taxes imposed by the state and central government.
The GST was being criticized globally by many people. Many businessmen and industrialists also opposed GST. Some considered the GST system as very complex by seeing the flaws in the system than other countries. The GST faced vast criticism by many political parties. Some considered it as a way of removing money from the pockets of the poor.
Different countries have adopted GST in different years. In 1986, GST was adopted by New Zealand. In 1991, Canada replaced Manufacture’s Sales Tax with the GST. In Australia, the Federal Wholesale Tax was replaced by GST in 2000. However, countries like Malaysia and Singapore have also adopted GST in 2005 and 1994 respectively.
Paragraph 4 – 200 Words (History)
The idea of adopting GST was first presented by the then Prime Minister Atal Bihari Vajpayee in the year 2000. An Empowered committee was formed for creating the structure of GST.
In 2004, a committee led by the advisor of finance minister Vijay L. Kelkar specified that many issues on the existing tax structure would be rectified by the emergence of GST. Many works had been carried out in implementing GST.
The union budget bill 2007-2008, holds the implementation date of GST. The date 1 April 2010 was set by the finance minister as the GST introduction date in India. Although it was delayed. On 22 March 2011, the Constitution Amendment Bill was passed in Lok Sabha to bring GST.
After facing many controversies, another deadline of 1 April 2017 was generated by Arun Jaitley (then finance minister). In August 2016 finally, the bill on GST was passed.
The GST was imposed by the Indian Government at midnight of 1 July. The launch session was attended by many high-profile guests. Many political parties boycotted the session. Many believe that the emergence of GST would hike the prices of goods which would be a curse for the middle and lower class populations.
Paragraph 5 – 250 Words (Origin & Regulation of GST)
The GST is the multistage, indirect tax that is implemented to remove other indirect taxes from the country. Payers now have to pay a single tax instead of paying multiple taxes. The GST is categorized as CGST (Central Goods and Services Tax), SGST (State Goods and Services Tax), IGST (Integrated Goods and Services Tax), and UGST (Union Territory Goods and Services Tax). The revenue collected through GST is equally shared between central and state governments.
Origin of GST
Atal Bihari Vajpayee, former Prime Minister of India has put forward the idea of GST implementation in India. He is also known as the father of GST in India. The process of implementing this tax was started in the year 2000. However, due to various oppositions and difficulties, the implementing dates were postponed. Finally, GST in India came into existence on the midnight of 1 July 2017.
Some Key Features of GST
- GST is a destination tax not an origin tax like that existed before.
- GST is not applied to the manufacturing of goods instead it is applied to the supply of goods.
- Taxpayers with turnover above 20 lakhsare free from GST.
- High rates are applied on luxurious items whereas low rates on daily needs.
GSTN (Goods and Services Tax Network)
It is a non-profit organization completely owned by the government. The GSTN portal can be used by the government to fetch the details of any taxpayers or related information. It holds the entire database of GST and is also used by taxpayers for various purposes.
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FAQs: Frequently Asked Questions on GST
Ans. Assam was considered as the first state of India to implement GST.
Ans. France was the first country to implement GST.
Ans. The highest GST slab is 28%.
Ans. Monaco, Bahamas, Kuwait, Bahrain, etc. are some tax-free countries.