India Celebrates 7 Years of GST

Lower Taxes on Everyday Items

India is celebrating seven years since the introduction of the Goods and Services Tax (GST) on July 1, 2017. This major tax reform has simplified the tax system and reduced the burden on consumers.

Key Benefits of GST

GST has led to significant reductions in tax rates on essential items such as hair oil, toothpaste, soap, detergents, wheat, rice, curd, lassi, buttermilk, wrist watches, TVs up to 32 inches, refrigerators, washing machines, and mobile phones. Some items even have zero tax rates now.

A study by the Finance Ministry shows that consumers save at least 4% on their monthly household expenses due to GST. This means people spend less on daily consumables like cereals, edible oils, sugar, sweets, and snacks.

How GST Works

Before GST, the tax system was complicated with multiple taxes like excise duty, service tax, VAT, CST, purchase tax, and entertainment tax. GST replaced these with a uniform tax structure, eliminating the cascading effect of taxes.

GST includes Central GST (CGST) and State GST (SGST) for transactions within a state, and Integrated GST (IGST) for interstate transactions. Businesses can claim credit for taxes paid on inputs, avoiding double taxation.

Role of the GST Council

The GST Council, chaired by the Union Finance Minister and including finance ministers from all states, has been crucial in implementing these reforms. The Council has periodically reduced taxes on key consumer goods, helping households manage their budgets better.

Conclusion

Overall, GST has simplified compliance, reduced the tax burden, and made the tax system more efficient. It has also removed tax gates at inter-state borders, facilitating the free flow of goods across India.