Study of goods and services tax with emphasis on corporate sector in India

Abstract

Introduction of Goods and Services Tax (GST) – is an important breakthrough- is the biggest comprehensive reform proposed in the sphere of tax regime in our country after the independence. It is proposed to merge customs duty, central excise duty and service tax into one single tax system i.e., Goods and Services Tax (GST). Thus, GST is a comprehensive indirect tax levy on sale, supply, manufacture and supply of goods and services. Through the introduction of GST at the Central level which not only include comprehensively more indirect Central taxes but will also integrate goods and services taxes for the purpose of set-off relief and may also lead to increase in revenue for the Centre. Thus the Goods and Services Tax at the Central as well as State level will provide more relief to agriculture, trade, industry and consumers through the comprehensive and broad coverage of set-off and service tax set-off, subsuming various taxes in the GST and setting out Central Sales Tax. If the GST is properly drafted by the appropriate calibration of the rates and fair compensation wherever necessary, there may be also resource/revenue increase both for the Centre and the States, mainly through increase in the tax base which will result in a possibility of a significant improvement in tax-compliance. Thus, GST will lead the possibility of cumulative gain for industry, agriculture, trade and common consumers as well as for the Centre and the State Governments. This dissertation traces the significant administrative issues which are involved in designing an effective Goods and Services Tax (GST) model with the objective of having an overall balanced structure of tax rates. There is also need for promoting the powers of Central Government as well as State Government in their taxation matters. Moreover, there is also very significant need to introduce a model that would easily instrument, while being generally acceptable to stakeholders. Thus, Goods and Services Tax (GST) is something about which each of us must understand because it is very soon going to affect our lives in a very significant manner.