Public Finance in India — Economics STD 12 Commerce / Arts — Question

The GST (Goods and Service Tax) came into effect in India on 1st July, 2017.
It was proposed by the Kelkar Task Force on Implementation of the Fiscal Responsibility and Budget Management (FRBM) Act in July, 2004.
GST is an indirect tax used in India on the supply of goods and services.
GST is comprehensive because it has replaced almost all indirect taxes like excise duty, entertainment tax, entry tax, etc.

GST is classified as follows :

• Central Goods and Service Tax (CGST) : It is a tax levied on interstate supplies of both goods and services by the central government which will be governed l by CGST Act.
• State Goods and Service Tax (SGST): It is received by the state in which the goods and services are consumed and not by the state where they are manufactured.
• Integrated Goods and Service Tax (IGST) : It is a tax levied on all interstate supplies of goods and services which will be governed by the IGST Act.

Benefits of GST :

• Comprehensive tax base with nation wide coverage of goods and services.
• Boost to foreign investments and export.
• Encouragement to manufacturing ‘Make in India’ campaign.
• Improvement in investment atmosphere in a country.
• Tax system in a country simplified.
• Generating more employment and poverty eradication.