Tax System India: Before and After GST
- October 18, 2018
- Posted by: RSIS
- Category: Management
International Journal of Research and Scientific Innovation (IJRSI) | Volume V, Issue X, October 2018 | ISSN 2321–2705
Faculty Member, IMSR, Kuvempu University, Shankaghatta, Shimoga, Karnataka, India
Abstract:- India is a developing country and India has a well developed tax structure,various indirect taxes were applied to goods and services in India by the central government and state government. An up-gradation was required to rectify the major fault of the indirect tax structure. Goods and services tax (GST) are becoming one tax which includes all these taxes. This paper deals with the structure of the Indian taxation at the past. The background, features of the GST and the impact of GST in the present scenario are also dealt with. It is considered that Goods and Services tax will remove all the complexity of the tax policy which was existing in India and will create a positive impact on Indian economy.
The Indian had a tax structure,which can be broadly divided into two parts, namely, direct tax structure and indirect tax structure.Direct taxes were levied on individuals and corporate entities and cannot be transferred to others. In direct tax again two taxes were there: Income tax and wealth Tax. On the other hand, indirect tax were levied on goods and services rather than on income or profits. in case of indirect tax part ,numerous taxes were there: Value Added tax (State Level), Central Sales tax(Central Level), Service tax (Central Level), Excise duty (Central & StateLevel) , Customs duty (Central Level). A brief of review of Indirect Tax Structure which were in India are given below:
- Value Added tax (VAT): Formerly it was a state level sales tax, which was replaced by value added tax with effect from the year 1st April 2005. VAT is implemented in all states of India except Jammu & Kashmir.
- Central Sales tax: It is the Central level sales tax which is levied on sales if sales occur in the course of Inter State Sales. CST levied as per Central Sales tax Act, 1956.
- Service tax: It is the central level indirect tax, which is levied on the value of taxable services. Taxable services are mentioned in section 67 and 67A of Finance Act 1994. There is no Service Act, but there are service tax Rules which are inserted in the Finance Act.
- Excise duty: Excise duty is both Central as well as State level indirect tax, which is levied on all excisable goods.
- Customs duty: Customs duty is one type of indirect tax levied on goods imported into India as well as on goods exported from India.Taxable event is imported into or export from India.