GST DAY 2022: India celebrates July 1 as the GST Day to commemorate the implementation of the Goods and Services Tax (GST) that replaced the old indirect tax regime in the country. The day was first celebrated on July 1, 2018, on the one-year anniversary of the implementation of the tax system. GST was launched in a majestic ceremony held in the central hall of Parliament on the intervening night of June 30 and July 1, 2017.
Introduced with the idea of “One Nation- One Market- One Tax” GST is a multi-stage, indirect consumption-based tax system that subsumes a host of domestic indirect taxes such as service tax, value-added tax, purchase tax, excise duty, and others under one head. However, items like petroleum, liquor, and stamp duty have been exempted from GST and still follow the old tax system.
As the historic rollout of GST marks its fifth anniversary today, here’s everything you need to know about the tax regime
- The idea of the new tax regime came into existence after a committee was set up to draft GST laws in 2000.
- The committee submitted its report to the government in 2004. Two years later in 2006, the finance minister proposed the GST introduction on April 1, 2010.
- It eventually it took over 17 years for GST laws to come into force.
- There are three taxes application under GST- CGST, SGST, and IGST
- CGST is collected by the central government on an intra-state sale whereas SGCST is collected by the state government on an intra-state sale. The IGST is collected by the central government on an inter-state sale
- Presently, there are four tax slabs under GST- 5 percent, 12 percent, 18 percent, and 28 percent.
- One of the main objectives of GST laws was to eliminate the cascading effect of taxes. Prior to GST, taxpayers could not set the tax credits of one tax against the other.
- The GST also aims at expanding the taxpayer base in India by simplifying the process of taxation.
- Most of the tax filing under GST has to be done online and thus it has also led to the digitisation of businesses in a way.
Ahead of the fifth-anniversary celebration of the tax regime, the GST council recently announced a waiver of the late fee for delay in filing FORM GSTR-4 for FY 2021-22 and an extension of the due date for filing FORM GST CMP-08 for Q1 of FY 2022-23. The move is intended to ease the burden on taxpayers.