Daily Current Affairs 2021 1 July: Goods and Services Tax (GST) Day | Daily Current Affairs 2021

1 July: Goods and Services Tax (GST) Day

Posted by
Subscribe for News Feed
Goods and Services Tax (GST) Day

Goods and Services Tax (GST) Day: GST Day is celebrated on 1st July every year by the Government of India (GoI) to mark the roll-out of the historic tax reform.

Highlights:

  • This year marks the 4th anniversary of the Goods and Services Tax (GST).
  • The date of July 1 was designated by the central government as ‘GST Day.
  • The main objective behind the implementation of this tax is to make a uniform tax system in the country.
  • During these years, several key policy initiatives were taken by the government to make the GST system and compliance mechanism simple, transparent, and technology-driven.
  • This year on GST day, the Union ministry of finance will issue certificates of appreciation to over 54,000 GST payers for timely filing of returns and a cash payment of the tax.

History:

  • The government decided to celebrate July 1, 2018, as ‘GST Day’ to mark the first anniversary of the new indirect tax regime.
  • GST was launched on the 1st July 2017 in a majestic ceremony held in the Central Hall of Parliament on the midnight of 30th June, 2017.
  • The celebration of the 1st GST day included listing the remarkable successes achieved that year, followed by the motto, “One Nation, One Tax, One Market.”
  • The tax implementation was deemed to be the 2nd historic moment in India’s independence despite the initial hardships.

Significance:

  • India’s biggest tax reform is a perfect example of cooperative federalism and its motto of ‘One Nation, One Tax, One Market’- binds India into an Economic Union.
  • One Nation, One Tax, One Market became a reality one year ago with the stroke of midnight on 1st July.
  • Before implementation of GST, Indian taxation system was a mix of central, state and local area levies.
  • GST replaced multi-layered, complex indirect tax structure with a simple, transparent and technology-driven tax regime.

What is GST?

  • The Goods and Services Tax (GST) is an indirect, multi-stage, comprehensive tax in India, imposed on the supply of goods and services.
  • It is intended to replace other indirect taxes like Value Added Tax (VAT).
  • The tax came into effect from 1 July 2017 through the implementation of the One Hundred and First Amendment of the Constitution of India by the Indian government.
  • The GST replaced the existing multiple taxes levied by the central and state governments.
  • As per the newly implemented tax system, there are 4 different types of GST:
  1. Integrated Goods and Services Tax (IGST)
  2. State Goods and Services Tax (SGST)
  3. Central Goods and Services Tax (CGST)
  4. Union Territory Goods and Services Tax (UTGST).

20 key facts related GST:

1. The Goods and Services Tax (GST) was first implemented in France.

2. India’s GST is based on the Canadian model.

3. GST in India was made on the recommendation of Vijay Kelkar Committee.

4. GST in India was implemented on July 1, 2017

5. The first state which implemented the GST was Assam.

6. Amitabh Bachchan has been made the brand ambassador of GST.

7. GST has been implemented under Article 279 of the Indian constitution.

8. GST Council was formed by the President of India in September 2016.

9. At present Finance Minister Nirmala Sitharaman is the Chairman of the GST Council.

10. At present GST Council has 33 members out of which 2 members are of centre and 31 members are from 28 state and 3 Union territories with legislation.

11. GST has been implemented by the 101st Constitution Amendment Act, 2016.

12. The GST was the 122nd constitutional amendment bill to be introduced in the Parliament of India.

13. The President of India approved GST bill on 8th September 2016.

14. During passing of GST bill in parliament; 336 votes casted in the favour of GST bill and 11 votes were against it.

15. There is a provision of 5 years imprisonment for those who do not pay GST.

16. There are 5 rates of taxes in GST i.e. 0%, 5%, 12%, 18% and 28%.

17. GST is an indirect tax in broader terms it can be said a federal tax.

18. After the implementation of GST, sales tax, service tax, customs duty, excise duty, VAT, Octroi tax etc. will not exist.

19. The biggest reason behind the implementation of the GST is to bring uniformity in the tax system of the country.

20. After the implementation of GST, tradition of ‘Tax upon Tax’ will be eliminated.

Importance of tax payment:

  • Taxes paid by citizens contribute to their economic benefit via services and operations.
  • They basically help the government run the country as a budget and source of income.
  • This helps to finance public sector services that indeed aid the population.
  • These include healthcare, defense, and the legal administration of the country.
  • In addition, tax payments help foster social security and the development of the economy.

Architecture and education are also aided by tax funding.

How does GST Help?

  • GST also helps level the inequalities in income due to the progressive structure.
  • The income effect is curved due to the reduced purchasing power of taxpayers.
  • There is also a substitution effect imposed between taxed and untaxed goods.
  • GST checks all the necessities of tax and helps consolidate all the indirect taxes under one umbrella factor.

Tax evasion:

  • Tax evasion is the illegal practice of deliberately avoiding the payment of taxes to the government.
  • Tax evasion is considered a criminal offence, and the entity doing so is liable to judicial charges and penalties.

Subscribe for News Feed

Leave a Reply

Your email address will not be published. Required fields are marked *

*