About Goods and Services Tax

The balance of taxation around the world is shifting. With many governments in developed and developing countries facing record budget deficits and high levels of unemployment, taxes on consumption are increasingly seen as playing an important role in the taxation mix. Already a number of countries have raised taxes on consumption, and it seems likely that more will follow a similar path over the next few years. Many economists believe that a greater focus on consumption taxes will help to stimulate growth because, unlike corporate income taxes, consumption taxes are viewed as having less of an impact on corporate profits and thus appear to have less of an impact on corporate investment decisions.

Taxes on goods and services will play an important role in correcting the significant fiscal imbalances that have built up over the past many years. Consumption taxes are also vital to helping governments manage their cash flow effectively because they are collected throughout the calendar year, not just at year- or quarter-end.

The One Hundred and First Amendment of the Constitution of India, officially known as The Constitution (One Hundred and First Amendment) Act, 2016, introduced a national Goods and Services Tax in India. Article 246A of the Constitution empowers the Centre and the States to levy and collect the GST.

GST is a destination based tax on consumption of goods and services. It is proposed to be levied at all stages right from manufacture up to final consumption with credit of taxes paid at previous stages available as setoff. In a nutshell, only value addition will be taxed and burden of tax is to be borne by the final consumer.

The CBEC has released a Concept and Status presentation as on 1st May 2017. You may view the same by clicking here.

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