GST Day, July 1

GST Day, July 1

India observes July 1 every year as GST Day to mark the anniversary of the implementation of nation’s new tax system GST (Goods and Services Tax). GST came into force on July 1, 2017, after a midnight ceremony launched it in the parliament on June 30. Its first anniversary was celebrated on July 1, 2018.

Importance of GST

India is a country with 28 states and 8 Union Territories. It is the second most populous country with a fast growing economy. India’s old taxation systems were not eligible to cope with its fast growing economy. India had a complex and multi layered indirect tax system. The idea of GST was first introduced by former Indian Finance Minister P.Chidambaram in his budget speech of 2006-2007. The new GST are able to break barriers of the inter-state trade and commerce and made India a single market. It is in the line with the Make in India campaign to achieve the goal of “One Nation, One Tax and One Market”.

Types of GST

There are four kinds of GST implemented through 122th constitutional amendment. Central Goods and Services Tax (CGST), State Goods and Services Tax (SGST), Union Territory Goods and Services Tax (UTGST), and Integrated Goods and Services Tax (IGST). Revenue collected from IGST will be divided between Central Government and State Government.

One of the major features of GST is that tax will be levied at the place of consumption or at destination while old tax system levied at the place where good are manufactured and services are rendered.

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