gst and its impact on indian economy essay 250 words

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GST Essay in English for Students

November 12, 2021 by Sandeep

Essay on GST: Implementation of GST is a big step for making the Indian economy better, stronger, and more transparent. GST made it easier for companies to record tax payments and schedule tax payments. Below we have provided GST Essay in English, suitable for classes 6, 7, 8, 9 & 10. This detailed essay on GST of 200-250 words is greatly helpful for all school students to perform well in essay competitions.

Essay on GST

GST is the abbreviation of Goods and Services Tax. GST is a kind of tax that was implemented in India on 1 July 2017. This tax is considered a major reform of the Indian tax system after independence. Since its implementation, GST has been a controversial tax in the context of the Indian tax system. The government collects tax from the country’s citizens in two forms; Direct Tax and Indirect Tax. Direct taxes are based on citizens’ income, and indirect tax is levied based on purchasing a product or service.

Income tax is a direct tax, whereas GST is an indirect tax that brought many taxes under the same roof. To understand the features and concept of GST, we have to take a quick look at the previous tax system. In the earlier tax system, the taxes used to be charged on every stage of goods. From the manufacturing of a product to its sales, a tax has to be paid.

These taxes used to be in VAT, excise, CST, but GST has replaced all different types of taxes. Earlier, the rate of taxes can be varied in different states, and there were two types of taxes; central taxes and state taxes. Now with GST, the rate of taxes is the same in all the country’s states, and taxes have been imposed jointly by the state and central government.

Benefits of GST

The earlier tax system in India was not favorable for small business units. Different types of taxes were present at that time, and on a product, different taxes were imposed. The motive behind the implementation of GST was “One Nation One Tax.” GST has its benefits and disadvantages.

The Indian economy is developing at lightning speed, and it has to compete with other more developed economies. Countries like Sweden, Denmark, Germany, Switzerland, and Japan have already implemented the GST. This tax helped the economy of the countries to grow. GST works like a common window for tax collection. Here are the other benefits of GST that will help the Indian economy in the long run.

Ease of Business – One Country One Tax made it easier for the business to set up their project in any state of the country. Earlier, the taxes on any projects used to vary from one state to another. But now, tax slabs are the same for one item in all the states of the country.

Easy Tax Filling – Different types of taxes like sales tax, Vat, services tax, etc., have been covered under GST, so tax filing has become much easier. The entire process of GST, from registration to filing returns, is available online.

Elimination of Different Taxes – Before GST, different types of taxes were used to apply to one product. Taxes like excise, octroi, sales tax, CENVAT, Service tax, turnover tax, etc., have different rates, but GST has included all of them in it.

Regulated Under-organised sector – Before the implementation of GST, many big industries like construction and textile were unorganised. But after the implementation of GST, companies associated with these industries have to complete all the compliance online then have to stick to regulations.

Defined tax for E-commerce – Before the implementation of GST, the business for E-commerce sites was difficult. For Up, they will have to apply VAT, and for other states like Rajasthan, they will have to remove it. So it was confusing for them. But GST made it easy as it’s one tax for all the states.

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Essay on GST in English 250 Words for All Students

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Introduction

GST is an indirect tax levied on the supply of goods and services in India. It was implemented on 1st July 2017, with the aim of simplifying the existing tax system in India. GST replaced several indirect taxes such as excise duty, service tax, and value-added tax.

What is GST?

GST is a consumption-based tax that is levied on the supply of goods and services. It is a multi-stage tax, which means that it is collected at every stage of the supply chain, from the manufacturer to the consumer.

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Types of GST

There are four types of GST in India, which are as follows:

• Central Goods and Services Tax (CGST)
• State Goods and Services Tax (SGST)
• Integrated Goods and Services Tax (IGST)
• Union Territory Goods and Services Tax (UTGST)

Benefits of GST

GST has several benefits, some of which are as follows:

• Simplified Tax Structure: GST has replaced several indirect taxes, making the tax system simpler and more transparent.
• Reduction in Prices: GST has resulted in a reduction in prices, as it has eliminated the cascading effect of taxes.
• Increased Compliance: GST has made it easier for businesses to comply with tax regulations, as it is a single tax system.
• Boost to the Economy: GST has given a boost to the Indian economy, as it has made it easier for businesses to operate across states.

Challenges of GST

GST has faced several challenges since its implementation, some of which are as follows:

• Technical Glitches: The GSTN (Goods and Services Tax Network) faced technical glitches during its initial implementation, causing inconvenience to businesses.
• Increase in Compliance Costs: GST has increased compliance costs for small businesses, as they have to maintain regular records and file returns.
• Classification Issues: There have been classification issues related to certain goods and services, which have led to confusion among businesses.

Impact of GST on the Economy

GST has had a significant impact on the Indian economy, some of which are as follows:

• Increase in GDP: GST has led to an increase in GDP, as it has made it easier for businesses to operate across states.
• Reduction in Inflation: GST has resulted in a reduction in inflation, as it has eliminated the cascading effect of taxes.
• Increase in Tax Revenue: GST has led to an increase in tax revenue, as it has widened the tax base.

Impact of GST on Businesses

GST has had a significant impact on businesses in India, some of which are as follows:

• Reduction in Logistics Costs: GST has led to a reduction in logistics costs, as it has made it easier for businesses to transport goods across states.
• Increased Compliance: GST has increased compliance for businesses, as they have to maintain regular records and file returns.
• Reduction in Tax Burden: GST has reduced the tax burden on businesses, as it has eliminated the cascading effect of taxes.

Example 2: Essay on GST in English 250 Words

Goods and Services Tax (GST) is a comprehensive tax levied on the supply of goods and services in India. It was implemented on 1st July 2017, and it replaced a number of indirect taxes such as service tax, VAT, excise duty, and more. GST is a multi-stage tax that is collected at every stage of the value chain, from manufacturing to final consumption.

The introduction of GST has brought about a significant change in the Indian tax system. One of the major benefits of GST is that it has made taxation more efficient and simplified. With the implementation of GST, businesses need to file only one tax return instead of multiple returns for various taxes. This has reduced the compliance burden on businesses and made tax filing more straightforward.

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Another benefit of GST is that it has made the tax system more transparent. GST is a digital tax that is collected electronically. This has reduced the scope of tax evasion and made the tax system more effective. Additionally, GST has also eliminated the cascading effect of taxes, which means that businesses can claim input tax credit for the taxes paid on their inputs.

GST has also helped in boosting the Indian economy. It has led to a reduction in the prices of goods and services, which has increased the purchasing power of consumers. This, in turn, has boosted demand, leading to an increase in production and growth of the economy.

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However, GST has also faced criticism from some quarters. Some businesses have complained about the increased compliance burden and the complexity of the tax system. Moreover, there have been concerns about the high tax rate on certain goods and services.

GST is a significant reform in the Indian tax system. While it has brought about many benefits, there are still some challenges that need to be addressed. Overall, GST has helped in making the tax system more efficient and transparent, and has contributed to the growth of the Indian economy.

Example 3: Essay on GST in English 250 Words

Goods and Services Tax (GST) is a comprehensive tax system implemented in India on July 1, 2017. It replaced multiple indirect taxes like excise duty, service tax, and value-added tax (VAT), and brought them under one umbrella. GST is a destination-based tax that is levied on the final consumption of goods and services.

GST has several benefits for the Indian economy. One of the primary advantages is the simplification of the tax system. The previous system had multiple taxes and complicated procedures, which made it difficult for businesses to comply with. GST has eliminated this complexity by providing a single tax system that is easy to understand and comply with.

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Another advantage of GST is that it has reduced the cascading effect of taxes. In the previous system, taxes were levied at every stage of the supply chain, which resulted in tax on tax. This increased the final cost of the product, making it more expensive for the end consumer. GST has eliminated this cascading effect by allowing businesses to claim input tax credit for taxes paid on inputs.

GST has also increased transparency in the tax system. Earlier, the tax system had several hidden taxes, which were not visible to the end consumer. With GST, all taxes are visible, and the consumer knows the exact amount of tax they are paying. This has increased accountability and reduced tax evasion.

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However, GST has also faced some criticism. One of the major criticisms is that it has increased the compliance burden on small businesses. Small businesses have to comply with the same procedures as large businesses, which can be challenging for them. There have also been issues with the GST network, which has faced technical glitches and delays.

GST has been a significant reform in the Indian tax system. It has simplified the tax system, reduced the cascading effect of taxes, increased transparency, and brought several other benefits. However, there are also some challenges that need to be addressed to make the system more effective and efficient.

Example 4: Essay on GST in English 250 Words

Goods and Services Tax, commonly known as GST, is a comprehensive tax regime introduced in India on 1st July 2017. It is an indirect tax that has replaced all the other indirect taxes that were levied previously by the Central and State Governments. GST is a uniform tax system that has been implemented in India to simplify the taxation process and bring transparency in the taxation system.

GST is based on the principle of "One Nation, One Tax, One Market" which means that a single tax will be applicable throughout the country on all goods and services. GST has been introduced in various countries around the world, including Canada, Australia, and Malaysia, among others.

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The implementation of GST has helped in reducing the cascading effect of taxes, which means that the taxes were levied on taxes in the previous taxation system. GST has also reduced the compliance burden on taxpayers by bringing all the indirect taxes under one roof. Under GST, all the businesses, big or small, are required to register under the GST regime, and the GST returns have to be filed regularly.

The GST system has also brought about an increase in the revenue collection for the Government, as it has led to the widening of the tax base. The GST Council, which is responsible for making recommendations on the implementation of GST, has also made several changes to the GST rates to provide relief to the taxpayers.

However, the implementation of GST has also faced criticism from some quarters. The small traders and businesses have complained about the complex compliance process, while the exporters have complained about the delay in refunds. The government has been making efforts to address these concerns and streamline the GST system.

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GST has brought about significant changes in the taxation system of India, and it has helped in creating a unified market for goods and services. The benefits of GST will continue to be felt in the long run, as it will help in boosting the economic growth of the country.

GST has been one of the most significant reforms in the Indian taxation system. It has simplified the tax system, reduced prices, and increased compliance for businesses. However, it has also faced several challenges, such as technical glitches and an increase in compliance costs for small businesses. Overall, GST has had a positive impact on the Indian economy, and it is expected to continue to do so in the future.

GST is an indirect tax levied on the supply of goods and services in India. It is a multi-stage tax that is collected at every stage of the supply chain, from the manufacturer to the consumer.

How many types of GST are there in India?

There are four types of GST in India, which are Central Goods and Services Tax (CGST), State Goods and Services Tax (SGST), Integrated Goods and Services Tax (IGST), and Union Territory Goods and Services Tax (UTGST).

What are the benefits of GST?

Some of the benefits of GST are simplified tax structure, reduction in prices, increased compliance, and boost to the economy.

What are the challenges of GST?

Some of the challenges of GST are technical glitches, increase in compliance costs for small businesses, and classification issues related to certain goods and services.

What is the impact of GST on businesses?

GST has had a significant impact on businesses in India, such as reduction in logistics costs, increased compliance, and reduction in tax burden.

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Essay on GST 1000+ Words

The Goods and Services Tax, commonly known as GST, is a monumental taxation reform in India that has transformed the way goods and services are taxed and simplified the complex tax structure. In this essay, we will explore the significance of GST in India, its impact on the economy, and why it’s considered a game-changer.

The Need for Reform

Before the introduction of GST, India had a complex taxation system with multiple taxes at the state and central levels. This complexity led to confusion and tax evasion and hindered the ease of doing business. GST aims to streamline this system.

A Unified Taxation System

GST brought various indirect taxes into a single, unified taxation system. It eliminated the cascading effect of taxes, where taxes were levied on top of taxes, reducing the overall tax burden on goods and services.

Simplicity and Ease of Compliance

GST simplifies tax compliance for businesses. It introduced a common online platform for tax filing, making it easier for businesses to register, file returns, and pay taxes. This reduced the bureaucratic hurdles and corruption associated with the previous system.

Impact on Prices

One of the primary concerns during the GST rollout was its impact on prices. While some goods became cheaper due to reduced taxes, others saw a slight increase. However, over time, GST stabilized, and the overall impact on prices has been positive.

Boosting Economic Growth

GST has played a significant role in boosting economic growth. It has made it easier for businesses to expand, reduced logistics costs, and promoted the ease of doing business, attracting both domestic and foreign investments.

Reducing Tax Evasion

GST has a robust mechanism to track transactions and detect tax evasion. This has led to increased compliance and a reduction in the informal economy, benefiting the government’s revenue collection.

Simplifying Interstate Trade

Before GST, interstate trade faced many challenges due to different state tax laws. GST has simplified interstate transactions, making it easier for goods and services to move across state borders.

Challenges and Concerns

While GST has brought about numerous benefits, it also faces challenges such as the need for continuous updates and addressing issues related to small businesses and compliance.

Future Prospects

GST is continually evolving to address challenges and improve its efficiency. The future of GST in India looks promising, with a focus on making it more taxpayer-friendly and digitally driven.

Conclusion of Essay on GST

In conclusion, the Goods and Services Tax (GST) has been a transformative taxation reform in India. It has simplified the taxation system, reduced tax evasion, and contributed to economic growth. While challenges remain, GST’s positive impact on the Indian economy cannot be denied. It has made India a more attractive destination for businesses and investments and has paved the way for a more transparent and efficient tax regime. As GST continues to evolve, it holds the promise of further enhancing India’s economic growth and development, making it a cornerstone of the country’s fiscal policies. The journey of GST reflects India’s commitment to progress and reform, and it remains an essential part of India’s economic future.

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Essay writing on Impact of Goods and Services Tax (GST) On Indian Economy in English

IMPACT OF GOODS AND SERVICES TAX (GST) ON INDIAN ECONOMY

India’s biggest tax reform since independence – the Goods and Services Tax (GST) has finally arrived. The milestone GST has been implemented from July 1, 2017. GST is a comprehensive value added tax levied on the supply and consumption of goods and services in an economy. It is an indirect, multistage and destination based tax. GST was introduced with the aim of ‘one nation, one tax, one market.’

GST has subsumed several taxes and levies such as excise duty, services tax and additional customs duty. State level VAT, surcharges and octroi also come under GST. The primary objective behind the introduction of GST was to remove the cascading effect of taxes and to bring more transparency into the Indian taxation system. GST is currently levied on every product except petroleum, alcohol and stamp duty on real estate. Most of the articles that are used daily have zero GST. The imposition of the taxes takes place on the recommendation of GST council.

GST by subsuming an array of indirect taxes has simplified tax administration. It has brought uniformity of tax rates and structures across the country. The robust IT infrastructure created under GST regime has resulted in better tax compliance by curbing leakages which will go a long way in reducing corruption. Now there are no hidden taxes which will in turn lower the cost of production. Introduction of GST is making Indian products more competitive in the domestic and international markets. It has resulted in widening of the tax base with significant increase in number of registered taxpayers and formalization of economy. It has reduced the incentive for tax evasion. The average monthly GST collections have started rising. So GST has increased the government revenues by extending the tax base.

In conclusion, GST is one of the biggest tax reforms of our country. By bringing the excluded items under the GST network and providing relief to some of the sectors bearing the brunt of higher taxes, it is expected to generate more positive impact on the economy.

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Introduction

GST is an acronym for goods and services tax. The GST has been introduced as a part of the reforms in India's taxation system to make the process simplified and more transparent. In this essay, we will discuss what GST is, how it is applied, the problem faced by businesses as well as common people due to GST implementation and the possible solutions that the government can take to mitigate those problems.

What is GST?

GST stands for Goods and Services Tax, and it is a tax that is levied on the manufacture, sale, or consumption of goods and services at a national level. The GST replaces all the indirect taxes that are currently being levied in India, such as service tax, value-added tax (VAT), central excise duty, etc.

The GST is levied on every transaction that takes place within India's territory, and it will be the responsibility of the buyer to pay the applicable taxes for any goods or services purchased. GST aims to do away with all indirect taxes like service tax, VAT, etc., making India a single market.

How is GST Applied?

The GST is a destination-based tax, and it will be levied on the value of the goods or services that are consumed within India's territory. The tax will be collected by the person who is responsible for the final consumption of the good or service. For example, if an item is produced in India and is sold to a consumer in another state, the GST will be levied by the state in which the final consumption takes place.

The GST is a multi-stage tax, and it will be levied at every stage of production and distribution of goods and services. The rate of GST at each stage will be based on the value addition that has taken place at that stage.

The GST aims to simplify the taxation system by ensuring a single tax rate across India's territory, thus making sure that goods and services are not taxed multiple times at different rates even if they cross through multiple states before reaching their destination.

Essay on GST

GST was firstly launched in 1954 in France. Currently, 160 countries in the world have implemented GST. As the Canadian model of GST has a federal structure, India has chosen the Canadian model of dual GST. GST stands for goods and service tax which has been applicable in India since July 1st 2017, so July 1st is declared as 'GST day. More specifically, Asam was the first state to get applied with GST. During the passing of the 'GST Bill' in the parliament, 336 votes were with it, and 11 votes were against it. The previous structure of indirect taxes in India was very complex, and quantitative taxes were levied by the central government and state government on goods and services. It has been a long-pending issue to streamline a variety of indirect taxes and implement a 'single taxation' system. 

GST requires businesses who have exceeded the prescribed threshold value to register and must keep records of all inputs and outputs. It is exempted from a few products such as alcohols, natural gas, motor spirits and crude petroleum products. GST is simple in a calculation, simply multiplying taxable amount by GST rate. GST rates are covered under 5 tax slabs as 0%, 5%, 12%, 18% and 28%. Most goods fall under the tax slab of 5%, 12% and 18%, while certain services are under 18%. Cement, tobacco lies under the highest tax slab of 28%.

The GST system is categorised into Central GST, also known as CGST, State GST known as SGST and Integrated GST known as IGST. CGST is levied by the central government, SGST by the state government and IGST by the central government on inter-state supplies. In short, while selling within the same state, CGST and SGST need to be paid, and in Inter-state, IGST is.

Due to the implementation of GST, the count of incidences of tax evasion came down in the country, which brings an increase in tax collection for the government. GST has been implemented under Article 279 of the Indian Constitution. The existence of sales tax, service tax, customs duty, excise duty, VAT, Octroi tax etc., vanished. Moreover, A very common procedure for registration of taxpayers, refund of taxes, uniform format of tax returns. With minimum tax or even no tax, the exporters are encouraged to export with the best quality and increase the economy. 

GST proved beneficial with more transparency, efficient compliance to central and state manufactures. GST assists in the growth of the Gross Domestic Products (GDP). GDP is expected to increase by 2%. Before the implementation of GST, the prices of the commodity were varying state to state. But, the prices became uniform throughout the country as the GST applied. The implementation of GST has proven a great decision for the country's people. The common man has gained momentum in life due to GST. True life is lived when a few changes occur in it. In addition, GST makes the Indian companies more compatible with the foreign companies and the Indian market more stable than the previous one.

GST is a country-wide tax and was introduced as The Constitution (One Hundred and First Amendment) Act 2017. GST had brought uniformity in the indirect taxation system, which had differently levied by states and centres before now. Different taxes, such as central excise duty, state VAT, etc., have been unified under one single umbrella of GST. Now, businesses do not have to pay taxes as per the state they belong to. Moreover, it has simplified tax calculation as well as returns filing. Under GST, businesses that exceed the prescribed threshold value must register themselves, keep records of input and output, and file their GST returns regularly.

GST is a 'one country-one tax' system. It requires businesses that have exceeded the prescribed threshold value to register and keep records of all inputs and outputs. There are five tax slabs under GST, that is 0%, 5%, 12%, 18% and 28%. Most goods fall under the 5%, 12%, and 18% tax slab, while certain services are subject to 18%. Cement, tobacco lies under the highest tax slab of 28%.

GST is governed by three different acts: The Central Goods and Services Tax Act 2017, Integrated Goods and Services Tax Act 2017, and Union Territory Goods and Services Tax Act 2017. It includes central excise duty that falls under One Hundred and the First Amendment of the Constitution of India.

FAQs on GST Essay

1.What is GST?

GST stands for Goods and Services Tax, a tax that has been applicable in India since July 1st, 2017. It is a single tax that is levied on goods and services, and it replaces the previous structure of indirect taxes in India, which were very complex. GST simplifies the calculation of taxes by multiplying the taxable amount by the GST rate. The tax rates are covered under 5 tax slabs which are 0%, 5%, 12%, 18% and 28%. One of the benefits of GST is that it brings more transparency and efficiency to the compliance of taxes by both central and state manufacturers. Businesses that exceed the prescribed threshold value are required to register and must keep records of all inputs and outputs.

2.How is GST beneficial?

There are many benefits of GST, such as the implementation of a simple taxation system that enables businesses to calculate their taxes easily. It eliminates the indirect taxes, including VAT, CST, Excise Duty and Service Tax. Also, it encourages exports which in turn leads to an increase in GDP. The government's revenue also increases since there is a reduction in tax evasion and the expenses on tax collection and compliance drop. Moreover, GST makes goods and services more affordable as most of them are now under the 18% tax slab. Businesses are no longer required to register multiple times for different indirect taxes, which means that the compliance process becomes easier, and there is less chance of error.

3.What is the difference between Central and State GST?

Central GST is also known as CGST, and State GST is also known as SGST. The main difference between the two is that CGST is levied by the Central Government, and SGST is levied by the State government. IGST is levied by the Central government on inter-state supplies. All three taxes (CGST, SGST and IGST) are collected by the Government of India and then distributed among the states. One should know that the tax rates for CGST, SGST and IGST are different. Different states have different tax slabs. One should be aware of the tax slab for their state in order to pay the correct GST. This will ensure that one is not required to pay more than the amount due.

4.What is the impact of GST on businesses?

The implementation of GST has positively impacted businesses as it has brought more transparency and efficiency to the compliance process. Businesses are now required to register only once and keep track of all input and output transactions. The tax rates are also clearer, making it easier for businesses to calculate their taxes. There is a reduction in tax evasion and the overall expenses on tax collection and compliance. GST has also made Indian businesses more competitive in the global market as it is now aligned with international taxation standards.

5.What are the benefits of GST for consumers?

The main benefit of GST for consumers is that it makes goods and services more affordable as most of them are now under the 18% tax slab. GST has also removed the cascading effect of taxes, which means that there is no tax on tax. This results in a decrease in the prices of goods and services. Consumers are now required to pay tax only on the amount they receive from the business. The benefits of GST for consumers also include a reduction in turn-around time for businesses since there is no need to register multiple times. This means that they receive their goods and services faster. The implementation of GST has had a positive impact on most sectors. The transportation, banking and insurance, telecom and IT sectors have all received benefits from GST.

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Impact of GST on the Indian Economy

Updated on : Jan 12th, 2022

GST the biggest tax reform in India founded on the notion of “one nation, one market, one tax” is finally here. The moment that the Indian government was waiting for a decade has finally arrived. The single biggest indirect tax regime has kicked into force, dismantling all the inter-state barriers with respect to trade. The GST rollout, with a single stroke, has converted India into a unified market of 1.3 billion citizens.

Fundamentally, the $2.4-trillion economy is attempting to transform itself by doing away with the internal tariff barriers and subsuming central, state and local taxes into a unified GST. The rollout has renewed the hope of India’s fiscal reform program regaining momentum and widening the economy. Then again, there are fears of disruption, embedded in what’s perceived as a rushed transition which may not assist the interests of the country. Will the hopes triumph over uncertainty would be determined by how our government works towards making GST a “good and simple tax”.

The idea behind implementing GST across the country in 29 states and 7 Union Territories is that it would offer a win-win situation for everyone. Manufacturers and traders would benefit from fewer tax filings, transparent rules, and easy bookkeeping ; consumers would be paying less for the goods and services, and the government would generate more revenues as revenue leaks would be plugged. Ground realities, as we all know, vary. So, how has GST really impacted India? Let’s take a look.

GST: The Short-Term Impact

From the viewpoint of the consumer, they would now have pay more tax for most of the goods and services they consume. The majority of everyday consumables now draw the same or a slightly higher rate of tax . Furthermore, the GST implementation has a cost of compliance attached to it. It seems that this cost of compliance will be prohibitive and high for the small scale manufacturers and traders, who have also protested against the same. They may end up pricing their goods at higher rates.

What the Future Looks Like

Talking about the long-term benefits, it is expected that GST would not just mean a lower rate of taxes, but also minimum tax slabs. Countries where the Goods and Service Tax has helped in reforming the economy, apply only 2 or 3 rates – one being the mean rate, a lower rate for essential commodities, and a higher tax rate for the luxurious commodities.

Currently, in India, we have 5 slabs, with as many as 3 rates – an integrated rate, a central rate, and a state rate. In addition to these, cess is also levied. The fear of losing out on revenue has kept the government from gambling on fewer or lower rates. This is very unlikely to see a shift anytime soon; though the government has said that rates may be revisited once the RNR (revenue neutral rate) is reached. The impact of GST on macroeconomic indicators is likely to be very positive in the medium-term. Inflation would be reduced as the cascading (tax on tax) effect of taxes would be eliminated.

The revenue from the taxes for the government is very likely to increase with an extended tax net, and the fiscal deficit is expected to remain under the checks. Moreover, exports would grow, while FDI (Foreign Direct Investment) would also increase. The industry leaders believe that the country would climb several ladders in the ease of doing business with the implementation of the most important tax reform ever in the history of the country.

On priority, it is up to the government to address the capacity building amongst the lesser-endowed participants, such as the small-scale manufacturers and traders. Ways have to be found for lowering the overall compliance cost, and necessary changes may have to be made for the good of the masses. GST will become good and simple, only when the entire country works as a whole towards making it successful.

About the Author

DVSR Anjaneyulu, known by the name AJ, I've got a vast experience in accounting, finance, taxes and audit. I'm always keen to simplify laws for the readers and learn about the Indian finance ecosystem. I also love listening to music, travelling, and, most importantly, conversing with people to better understand the world.. Read more

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Essay on GST for Students and Children

500+ words essay on gst.

Goods and Services Tax (GST) refers to an indirect tax. The implementation of this tax is in India. The collection of this tax takes place from the point of consumption. This is in contrast to collection from the point of origin like previous taxes. Furthermore, this tax’s imposition is at every step in the production process. The refund is for all the parties in the various stages of production. Also, GST includes almost all indirect taxes.

Explanation of GST

First of all, Goods and Services Tax (GST) is a single tax system. The imposition of this tax takes place jointly by the center and the state. Furthermore, the imposition happens with the recommendation of a federal council.

In GST, the goods and services are divided into five different tax slabs. This is for the purpose of the tax collection. Above all, the tax slabs are – 0%, 5%, 12%, 18% and 28%. Also, petroleum products, alcoholic drinks, and electricity do not come under GST. Rough precious and semi-precious stones carry a special rate of 0.25%. Gold also carries a special rate of 3%.

GST certainly subsumed several taxes and levies. These include central excise duty, services tax, and additional customs duty. Furthermore, state-level VAT , surcharges, and Octroi also come under GST. The GST regime has done away with levies. Also, these levies were applicable to inter-state transportation of goods. Most noteworthy, the application of GST is on all transactions. These transactions are sale, purchase, transfer, lease, and import.

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Benefits of GST

First of all, the cascading tax effect refers to a tax on tax. Most noteworthy, GST eliminates the cascading effects of Tax. This is because GST is a comprehensive indirect tax. It certainly brings almost all indirect taxation under one umbrella.

Another notable advantage of GST is the increase in the threshold for registration. Earlier, a VAT was applied if the turnover was more than Rs 5 lakh. This VAT’s application was upon a business. Furthermore, there was no service tax when turnover was less than Rs 10 lakh. In contrast, under GST this threshold is Rs 20 lakh. Hence, this means an exemption for many small traders and service providers.

Small businesses can certainly benefit significantly under GST. Furthermore, these small businesses have a turnover of Rs 20 to 75 lakh. The benefit of these small businesses takes place due to the composition scheme. Under GST, there is an option for small businesses to lower taxes. They can do so by utilizing the composition scheme.

The entire process of GST is available online. Most noteworthy, it is an easy and simple online process. Therefore, it is really beneficial for start-up businesses. This is because they don’t have to struggle to get different registrations. In conclusion, GST has been a revolutionary tax system for India. Most noteworthy, many experts hail it as one of the biggest tax reforms. GST certainly is beneficial for the entire population of India.

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Home » Knowledge Base » GST and its Impact on Business in India [Student Essay]

GST and its Impact on Business in India [Student Essay]

• Saumya Snehal
• Apr 11, 2017
• 43 Comments

A just and viable tax regime is vital for the sustainable economic growth and fiscal consolidation of any economy in the world.

This assumes a greater importance in a developing economy like India where although we have a high demographic dividend, we are yet to convert it to the proportionate human capital, which will in turn benefit the social and economic growth of the country.

In order to facilitate this, we need a conducive environment as we push forward towards becoming a better developed nation.

In order to become a more economically developed nation, we need a transparent, just, equitable and fair taxation system that is easy to administer.

The essential rationale behind this is that the taxation system should be reasonable and non-discriminatory in respect to both the direct taxes payable by individuals and the indirect taxes payable by corporations and industries so as to make them more tax-compliant and bring the larger populace in the taxation net to in turn aid the government in taking development projects.

Goods and Services Tax (GST) is a reformatory legislation which is a single tax on the supply of goods and services, right from the manufacturer to the consumer.

Credits of input taxes paid at each stage will be available in the subsequent stage of value addition , which makes GST essentially a tax only on value addition at each stage.

The final consume will thus bear only the GST charged by the last dealer in the supply chain with set-off benefits at all the previous stages.

NEED FOR GST LEGISLATION

The tax-GDP ratio of a country is an important indicator that helps understand how much tax revenue is being collected by the government as compared to the overall size of the economy and unfortunately, this ratio is a dismal low for India despite having years of high growth, the lowest in BRICS countries.

From 2001 to 2015 the Indirect Tax-GDP ratio has increased from 10.28-11.6 only and therefore there is an urgent need to raise this ratio.

The burden of regressive taxes is another issue that the GST aims to redress. Direct taxes are progressive taxes as they are contingent on the ability of the taxpayer to pay.

In India, more than 60% of the total tax collected is accounted for indirect taxes, implying that the tax structure is extremely regressive and since the rich and poor are subject to the same tax rate which is unfair and therefore the indirect taxes need to be hauled.

Furthermore, the sharing of financial resources and revenue from the tax system between the Centre and the State is made simpler by the GST tax reform.

Furthermore the cascading of taxes with both the Centre and State levying taxes as the taxes levied by the State Government are not available to set off against the taxes being levied by the State Governments.

At the central level GST will subsume Central Excise Duty, Additional Excise Duty, Service Tax, Additional Customs Duty (Countervailing Duty), and Special Additional, Duty of Customs. At the State level, Subsuming of State Value Added Tax/ Sales Tax, Entertainment Tax, Central Sales of Tax, Octroi and Entry Tax, Purchase Tax, Luxury tax, Taxes on lottery, betting and gambling.

Also, the variety of VAT tax laws in the country with disparate tax rates and dissimilar tax practices divides the country into separate economic spheres thereby creating tariff and non tariff barriers thereby hindering the free flow of trade in the country.

This in turn also constitutes high compliance cost for the taxpayers disadvantageous to economic growth of a country.

GSTN, the Goods and Services Tax Network:

Along with GST, there are a number of reforms that the Government is bringing in to strengthen the manufacturing bone of India.

GSTN, the Goods and Services Tax Network is being setup with the objective to provide the requisite IT infrastructure and services for the proper roll-out and implementation of GST.

It is a company under Section 25 which implies that its is a non government, private limited company which will not work for profit.

The division of powers is such that the Central Government holds 24.5% equity in GSTN while the states inclusive of NCT of Delhi and the union territory of Puducherry and the Empowered Committee of the State Finance Ministers collectively hold another 24.5%, the remaining 51% vests with other Government financial institutions.

This company will work towards providing a proficient GST Eco-System. It will encourage and collaborate with GST Suvidha Providers to roll out GST applications for providing simplified services to the stakeholders.

It is also entrusted to carry out research in order to conclude better and best practices and to indulge in staff training and also consultancy to the Tax Authorities and other stakeholders.

Another very important feature of the GSTN is to develop Tax Payer Profiling Utility which is a very important aspect in ensuring efficient administration and achieve the GST goals.

GST Council

This is the most important aspect of the Goods and Services Tax, in ways bigger than the GST bill too, as the entire structure of GST is contingent on this foundation.

It is an apex body headed by the Union Finance Minister Mr. Arun Jaitley with the State-nominated ministers and the Union Minister of State for Finance( In charge of Revenue) as members.

It is imperative to note that the decisions of the GST Council will shape whether this ambitious tax reform will achieve its due desired effect or not.

IMPACT OF GST:

Major Benefits to the Economy As A Whole:

• The present scenario of differing tax rates in different states obstructs cooperative federalism.

GST will bring uniformity and also deplete the cascading consequence of these taxes by giving input tax credit, having a comprehensive tax inclusion with minimum exceptions which will in turn help the Industry to benefit from the proposed common procedures and claim credit for the tax paid.

• GST is expected to increase the mobilization of resources available for property alleviation and development of the country as pointed out by the Prime Minister, Narendra Modi.

This will take place in two ways: (a) directly the resources available to the poorer states will increase substantially; (b) indirectly as the tax base becomes more buoyant.

• The common base and common rates across goods and services and very similar rates across Centre and States will result in effective administration and increase compliance while also ensuring the better management of taxes collected in the State.

Also, there is a provision to maintain the requisite fiscal autonomy to the States with the power to levy additional excise taxes on certain “sin” goods like, tobacco, alcohol, etc.

• The complicated tax-levy system categorized by distortions between States and Cente which divides the country into separate economic zones with the help of GST will become one common national market.

This impedes the Make in India process which will get a boost through GST as it is making tax compliance easier and removing ambiguity and at the same time as GST will be applied on imports, domestic manufacturing would be encouraged.

• Tax Governance will get a positive boost through this regime, mainly, through the feature of input tax credit.

To claim input tax credit, each dealer has an incentive to request documentation from the dealer behind him in the tax chain which will ensure tax compliance. Also this would further require producers to buy materials from registered dealers and therefore will bring in more and more vendors in the taxation net.

Furthermore, the dual monitoring structure of the GST by both Centre and State will make tax evasion more prone to detection.

• There will be reduction in prices of goods as taxes would now be exempted from the production cost and at the same time it will put better goods and services within the reach of a larger number of the populace and as such increase the living standards of the country.

• The successful implementation of GST would give a strong signal to the foreign investors about India’s increased creditworthiness, lesser compliance and procedural costs in the taxation sphere and remove the complexities faced by the foreign investors who were reluctant to invest in consonance with the existence of virtual economic zones throughout the country.

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Essay on GST

Students are often asked to write an essay on GST in their schools and colleges. And if you’re also looking for the same, we have created 100-word, 250-word, and 500-word essays on the topic.

Let’s take a look…

100 Words Essay on GST

Introduction to gst.

GST, or Goods and Services Tax, is a value-added tax levied on most goods and services sold for domestic consumption. It is a single tax that replaces multiple taxes imposed by the state and central governments.

Benefits of GST

GST simplifies taxation by unifying different taxes, reducing the cascading effect of tax on tax. It encourages transparency, aids in the growth of the economy, and is beneficial for both businesses and consumers.

Challenges of GST

While GST has many advantages, it also faces challenges like technical glitches in GSTN, increased compliance burden, and initial resistance from small businesses.

Also check:

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250 Words Essay on GST

Introduction.

The Goods and Services Tax (GST) is a comprehensive, multi-stage, destination-based tax system introduced in India on July 1, 2017. It has replaced several indirect taxes, fostering a uniform tax structure and enhancing ease of doing business.

Implications of GST

GST has brought about significant changes in the economic landscape. By eliminating the cascading effect of taxes, it has reduced the overall tax burden on consumers. It has also promoted competitiveness by establishing a level playing field for businesses.

Challenges and Opportunities

Despite its benefits, GST implementation has faced challenges. These include technical glitches, a complex structure, and initial resistance from businesses. However, the government has been proactive in resolving these issues, showcasing adaptability.

On the brighter side, GST has opened up opportunities for businesses. It has simplified the tax structure, making compliance easier. Additionally, the input tax credit mechanism has incentivized businesses to be part of the formal economy, driving economic growth.

Future Outlook

Looking forward, GST is expected to play a pivotal role in India’s economic narrative. With the government’s continuous efforts to simplify GST and make it more business-friendly, it is anticipated to stimulate economic growth and enhance India’s global competitiveness.

In conclusion, while GST implementation has had its fair share of teething troubles, its long-term benefits are undeniable. It is a progressive tax reform that has the potential to transform India’s economic trajectory.

500 Words Essay on GST

GST, or Goods and Services Tax, is a comprehensive, multi-stage, destination-based tax implemented in India on July 1, 2017. This tax system replaced many indirect taxes previously levied by the Indian government, with the aim of streamlining the taxation process and reducing the prevalence of double taxation.

The Mechanism of GST

GST operates on a multi-stage system, meaning it is applied at each step of the production process. However, it is refunded to all parties involved in the various stages of production other than the final consumer. This destination-based aspect ensures that the tax is collected from point of consumption rather than point of origin, thereby ensuring a more equitable distribution of the tax burden.

Types of GST

There are four types of GST in India: Central GST (CGST), State GST (SGST), Integrated GST (IGST), and Union Territory GST (UTGST). CGST and SGST are levied on intra-state transactions, while IGST is levied on inter-state goods and services. UTGST, meanwhile, is levied on transactions in the Union Territories.

The Impact of GST

The implementation of GST has had far-reaching implications. It has simplified the tax structure by merging a multitude of taxes into a single system. This has reduced the complexity of doing business, thereby promoting entrepreneurial activity and economic growth.

GST has also increased the tax base, as it has brought many previously untaxed businesses into the taxation net. This increased revenue can be used by the government to invest in infrastructure, healthcare, education, and other vital sectors.

Challenges and Criticisms of GST

Despite its advantages, GST has also faced criticism. The main challenge lies in its implementation, as it requires a robust IT infrastructure and widespread internet access, which are lacking in some parts of India. Additionally, the multi-tiered tax rate structure has been criticized for being complex and burdensome for small businesses.

Moreover, some critics argue that GST has increased the cost of certain goods and services, impacting the common man. The tax slabs are also a point of contention, as luxury and essential goods are taxed at the same rate in some cases.

In conclusion, while GST has streamlined taxation and increased revenue, it is not without its challenges. It is a significant step towards a more comprehensive and equitable tax system. However, it requires effective implementation and continuous refinement to ensure it meets its objectives and benefits all sections of society. Despite the criticisms, GST represents an important evolution in India’s economic landscape, marking a shift towards a more unified and transparent taxation system.

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Impact of GST on the Indian Economy and Consumer Experience

• April 15, 2018
• Posted by: RSIS
• Category: Management

International Journal of Research and Scientific Innovation (IJRSI) | Volume V, Issue IV, April 2018 | ISSN 2321–2705

Dr. Arekari Shanta 1 , Prof. R. L. Nandargi 2

   1 Associate Professor, Department of Management Studies, SCOE, Pune, Maharashtra, India 2 Department of E & TC, IOT Hadapsar, Pune, Maharashtra, India

Abstract: India’s biggest tax reform is now a reality. A comprehensive dual Goods and Services Tax (GST) has replaced the complex multiple indirect tax structure from 1 July 2017.The concept of GST was seen for the first time in 1999. On 8 August 2016, the Constitutional Amendment Bill for roll out of GST was passed by the Parliament, followed by ratification of the bill by more than 15 states and enactment of the bill in early September.

It is important to understand that GST is not a tax concession scheme where the government has reduced the tax rates and hence all the goods and services would become cheaper once GST is implemented. Government was attempting to fix a single Revenue Neutral Rate (RNR) on the goods and services so that the total tax revenue of the State and the Central Government remain the same. However, due to practical considerations and keeping in view the social conditions of India, four GST slabs have been set at 5%, 12%, 18% and 28% for different items or services. There is also a special rate for precious metals. The rate of 18% would however be applicable for most goods and services.

Key words: Revenue, Tax rate, Goods and Services Tax, Indian Economy.

I. INTRODUCTION

Government is trying to see that the new GST rates remain more or less similar to the effective tax rates of excise, service tax and VAT in the present time. Hence, the prices of most commodities would remain the same. However, the immediate impact of GST would be as following.

All the services would become more expensive immediately since the present Service Tax rate is only 15% which is now raised to 18% in GST.

Some goods would become cheaper due to lower rates levied on such items.

Most goods would become more expensive since the GST rate of 18% or 24% is much more than the present VAT rates which are around 12-15 %. The dealers and retailers are NOT likely to pass on this extra rate immediately to the consumer and they would profit from the increase Input Credit Tax (ICT). However, soon the consumer would reap the benefit and the prices would come down.

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Examine the Goods and Services Tax (GST) reform in India and its progress over the past six years. Throw light on the challenges faced, the impact on the economy, and the potential for further improvements.

Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

4. Examine the Goods and Services Tax (GST) reform in India and its progress over the past six years. Throw light on the challenges faced, the impact on the economy, and the potential for further improvements. (250 words)

Difficulty level: Moderate

Reference: Indian Express

Why the question : The question explores the implementation and impact of the Goods and Services Tax (GST) in India. Key Demand of the question: To write about various successes and limitations of GST and reforms that are needed in it. Directive word:  Examine – When asked to ‘Examine’, we must investigate the topic (content words) in detail, inspect it, investigate it and establish the key facts and issues related to the topic in question. While doing so we should explain why these facts and issues are important and their implications. Structure of the answer: Introduction:  Begin by aims and objectives behind the launch of GST. Body: First, write about the achievements of GST – simplified tax structure, an increase in the tax base, and a reduction in tax evasion. Substantiate with examples, facts or statistics. Next, write about the shortcomings of GST – high tax rates, compliance burden, and complexities in the filing process have been faced. Substantiate with examples, facts or statistics. Next, suggest reforms in GST. Conclusion: Conclude with a way forward.

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Essay on Indian Economy for Students in 100, 200 and 500 Words

• Updated on  
• Jan 12, 2024

Essay on Indian Economy: The Indian economy is a mixed economy, which is primarily driven by the agriculture and services sectors. The agriculture sector contributes to nearly 20% of India’s GDP. Whereas, the services sector accounts for nearly 50% of the country’s GDP. Furthermore, the manufacturing sector contributes to around 28% of India’s GDP. Globally, India is ranked 142nd and 125th in terms of per capita income and nominal GDP, as per the International Monetary Fund (IMF). 

Since independence, India has transformed from an agricultural country to a mixed economy due to liberalization in 1991. To read more about the Indian economy, keep reading the blog on sample essays about the same. 

Table of Contents

• 1 100 words Essay on Indian Economy
• 2 200 words Essay on Indian Economy
• 3 500 words Essay on Indian Economy

Also Read: Class 12 Macroeconomics

100 words Essay on Indian Economy

The Indian economy is dynamic and rapidly growing. Currently, the economy is characterised by various sectors. The key contributors to the country’s economic growth are the agriculture, services, and manufacturing sectors. However, this was not always the case. India was an agricultural economy when the British left India in 1947 after plundering the sub-continent from 1600 to 1947. 

After independence, India became a part of the global economy in 1991, when the central government adopted the Liberalisation, Privatisation, and Globalisation (LPG) policy. Since then, the Indian economy has expanded in the service and manufacturing sectors significantly. At present, the economy is driven by government initiatives like Make in India and Digital India. However, we have a long way to go. 

Also Read: Find Economics PYQ UPSC Mains Question Bank: 2021-2018

200 words Essay on Indian Economy

Agriculture is the backbone of the Indian economy and of rural livelihoods. It not only employs a majority of the Indian population but also provides raw materials to different industries. In recent years, advancements and innovations in the industrial sector through schemes like the National Manufacturing Policy (NMP), the Technology Upgradation Fund Scheme (TUFS), and Make in India have contributed to the growth of the Indian economy. 

Despite progress and innovations in farming practices and the industrial sector both these industries are facing losses. This is due to limitations in government policies and a lack of awareness among the people of India. Even today, the agricultural sector is affected by outdated farming methods, dependency on weather, and a lack of skilled workers. All these issues need to be addressed by government policies that help promote an environment-friendly agriculture system that is profitable in nature. This will help the Indian economy grow.

Also, investment in business, easy bureaucratic processes, skilled development programmes, and research and development initiatives, will help in creating favourable conditions for the growth of the Indian economy.

Thus, to uplift the Indian economy, it is necessary to maintain a mutually beneficial partnership between the government and the agriculture and manufacturing sectors. The agriculture sector can grow by overcoming the challenges in farming practices. Whereas, the industrial sector will expand due to strategic investments and progressive policies.

Also Read: Indian Students Adding to the UK Economy

500 words Essay on Indian Economy

Policies for the growth of the Indian economy aim at overcoming poverty, reducing wealth gaps, and optimising productivity. The main purpose of bridging the wealth gap between different sections of society is to improve the overall well-being of its population for sustainable economic development.   

1. Overcome of Poverty

As per the Niti Aayog report of July 17, 2023, there is a decrease in the population of people vulnerable to poverty. The percentage of decline is from 24.8 percent to 14.9 percent for four consecutive years, from 2015-2016 to 2019-2021. However, the government is implementing various policies such as the National Education Policy, 2020 (NEP), the National Health Policy, the National Employment Policy (NEP) and many more important programs and policies to decrease the numbers of percentage so that there can be boosted in education, healthcare, and employment opportunities can be raised. 

More educated people with good health will better contribute to the Indian economy. Moreover, creating jobs and small businesses will also lead to increased income levels help reduce poverty and encourage economic growth.

2. Reduction of Wealth Gaps

The second important factor in the rise of the Indian economy is reducing the gap between the poor and the rich. To address the wealth gap, various programmes and schemes, such as the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and the Pradhan Mantri Jan Dhan Yojna (PMJDY), are implemented. Furthermore, to support business innovators from minority communities, small-scale financing is provided through MUDRA Bank.

For social security, initiatives such as Pradhan Mantri Jeevan Jyoti Yojana and Pradhan Mantri Jeevan Jyoti Yojana are given to encourage social security. These initiatives contribute not only to narrowing the wealth gap through the even distribution of resources but also to establishing a pathway for economic growth in the Indian economy.

3. Fewer Labour Inputs and More Productivity

To encourage both domestic and international companies to invest in the Indian economy, particularly in manufacturing, and innovation, and more importantly, to achieve higher productivity with less input initiatives such as Make in India are encouraged, which not only helps for advancement in technology but also aid in mastering the skills.

The aim of the government of India’s Make in India scheme is to increase productivity and efficiency and reduce dependence on manpower across the different sectors of the Indian economy.

4. Abundance of Goods and Services

The rise in the production of goods and services for a certain period as compared to a previous period helps in the contribution of increased consumption by promoting market competitiveness and driving the innovation of an Indian economy.

Providing consumers with a good number of goods and services not only helps in catering choices but also creates opportunities for boosting business. An Indian economy with a steadfast supply of goods and services leads to stability of prices and improvement in the standard of living of the people.

In conclusion, addressing poverty, reducing the wealth gaps, increasing productivity with fewer labour inputs, and ensuring an abundant supply of goods and services helps in developing the Indian economy. The Indian government is actively implementing policies and technological advancements to encourage these factors and continually revising them to create a broad and steady Indian economy.

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Ans. GDP = Consumption + Investment + Government Spending + Net Exports or  GDP = C + I + G +NX. Here, (C) is the consumption that represents private-consumption expenditures by households and nonprofit organizations, (I) is the investment that refers to business expenditures by businesses and home purchases by households, government spending, (G) denotes expenditures on goods and services by the government, and net exports (NX) represents a nation’s exports minus its imports.

Ans. Low per capita income, large population, the service sector and diverse sectors such as manufacturing and agriculture are characteristics of the Indian economy.

Ans. Pandit Jawaharlal Nehru is the father of the Indian economy. 

Ans. Agriculture is the backbone of Indian economy as it helps in providing raw materials as well as raw materials to the various industries. 

Ans. The full form of GDP is Gross Domestic Production.

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Home — Essay Samples — Economics — Indian Economy — Impact Of Covid-19 On The Indian Economy

Impact of Covid-19 on The Indian Economy

• Categories: Covid 19 India Indian Economy

About this sample

Words: 1417 |

Published: Feb 8, 2022

Words: 1417 | Pages: 3 | 8 min read

Table of contents

Introduction.

• https://en.wikipedia.org/wiki/Economy_of_India
• https://www.researchgate.net/publication/341266520_Effect_of_COVID-19_on_the_Indian_Economy_and_Supply_Chain
• https://etinsights.et-edge.com/wp-content/uploads/2020/04/KPMG-REPORT-compressed.pdf

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