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The Constitution (One hundred and first Amendment) Act, 2016 introduced a national GOODS AND SERVICE TAX in India which is to be implemented from 1st April 2017. GST is one of the biggest financial and tax reforms since Independence. It is a single indirect tax that combines several indirect taxes. The GST bill was passed by the Parliament on August, 2016 with an objective to create a uniform tax system by replacing various indirect taxes levied on goods and services by central and state governments like Central Exercise, Service Tax, Customer tax, Central Surcharges, Central and State Cess, VAT/Sales Tax, Entertainment Tax, Luxury Tax etc.
GST will create a far-reaching impact on almost all the aspects of the business operations in the country. It will create its impacts on various sectors in various ways.
Many companies in India will be benefited in several ways under the new taxation system of GST.
Currently, companies pay many indirect taxes in different states at different rates. GST will combine all these indirect taxes in the form of a single tax. Indirect tax has a huge impact on business as these taxes comprises a higher share of total tax in developing countries like India. GST, is a huge boon for India considering that the tax burden and government interference in the taxation procedure is very high and time-consuming. This complex taxation system slows down the work process of the companies. Moreover, there is no self assessment procedure in current VAT system and it is a very hectic work for the companies.
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