Descriptive English for SBI PO

1.Write a short note on Goods and Service Tax
          
The Goods and Product Tax Bill or GST Bill, officially known as The Constitution (122nd Amendment) Bill, 2014, would be a Value added Tax (VAT) to be implemented in India, from April 2016. GST stands for “Goods and Services Tax”, and is proposed to be a comprehensive direct tax levy on manufacture, sale and consumption of goods as well as services at the national level. It will replace all indirect taxes levied on goods and services by the Indian Central and State governments. It is aimed at being comprehensive for most goods and services.
India is a federal republic, and the GST will thus be implemented concurrently by the central and state governments as the Central GST and the State GST respectively Exports will be zero-rated and imports will be levied the same taxes as domestic goods and services adhering to the destination principle.
 The Goods and Service Tax or GST is a taxation system where there is a single tax in the economy for goods and services. This taxation system is meant to create a single taxation system in the entire country for all goods and services.
 Advantages of GST

Introduction of a GST is very much essential in the emerging environment of the Indian economy.

• There is no doubt that in production and distribution of goods, services are increasingly used or consumed and vice versa. Separate taxes for goods and services, which is the present taxation system, requires division of transaction values into value of goods and services for taxation, leading to greater complications, administration, including compliances costs. In the GST system, when all the taxes are integrated, it would make possible the taxation burden to be split equitably between manufacturing and services.
• GST will be levied only at the final destination of consumption based on VAT principle and not at various points (from manufacturing to retail outlets). This will help in removing economic distortions and bring about development of a common national market.
• It will also help to build a transparent and corruption-free tax administration. Presently, a tax is levied on when a finished product moves out from a factory, which is paid by the manufacturer, and it is again levied at the retail outlet when sold.

Benefits of GST

For the Centre and the States

According to experts, by implementing the GST, India will gain $15 billion a year. This is because, it will promote more exports, create more employment opportunities and boost growth. It will divide the burden of tax between manufacturing and services.

For individuals and companies

In the GST system, taxes for both Centre and State will be collected at the point of sale. Both will be charged on the manufacturing cost. Individuals will be benefited by this as prices are likely to come down and lower prices mean more consumption, and more consumption means more production, thereby helping in the growth of the companies.

Items not under GST

Alcohol, tobacco, petroleum products

Bottlenecks in the implementation of GST

Though the Government wants the GST Bill to be implemented by April 2016, there are certain bottlenecks which need to be taken care of before that:

• What preparations are needed at the level of Central and State Governments for implementing the GST?
• Whether the Government machinery is efficient enough for such an enormous change?
• Whether the tax-payers are ready for such a change?
• What will be the impact on the Government’s revenue?
• How will the manufacturers, traders and ultimate consumers be affected?
• Will GST help the small entrepreneurs and small traders?