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What is GST? Why is that Important?

What is GST?

What is GST Bill?

GST Bill

GST Bill

There are two kinds of taxes, direct and indirect. Direct taxes are those which are directly to be paid by the assess to the Government and in India can be levied only by central government, i.e., you have to pay your own income tax.

Indirect tax is that tax whose burden can be shifted to another person, and in India can be levied by both central and state governments. Some of the indirect taxes in India include service tax, customs duty, excise duty, value added tax, etc.

Since state governments have the right to levy VAT, there are varying rates of VAT in different states, which in turn changes the price of goods from one state to another. Also several other indirect taxes are being levied at different rates applicable to different goods and services.

Goods and service tax (GST) aims at eliminating different rates of taxes within India and bring in a uniform rate at which goods and services can be taxed. This will ensure uniform prices of goods in India and will benefit people in all states as it prevents one state from excessively taxing certain commodities or services.

Apart from the above, it also simplifies things for businessmen who had to earlier go through several taxes and ended up avoiding paying tax just because they found it impossible to calculate the exact amount which they had to pay. GST hence also helps in curbing illegal trade and brings a lot of lost revenue to the Government apart from reducing black money.

The NDA government has taken a landmark step in taxation and has successfully passed something which had been stalled for several years. Kudos to Narendra Modi and team!


To achieve National Market in agriculture, there is need for unifying the provisions of Agricultural Produce market committee (APMC) Act, Essential Commodities Act and Warehousing (Development and Regulations) Act.

The implementation of GST will ensure several tax/cess applicable on marketing of agricultural products is abolished. It also unifies the above mentioned Acts and prevents different state governments from imposing different rates.

How GST Bill Will Help

Hence GST will help in:
1. Improving marketing efficiency
2. Development of virtual markets through warehouses
3. Reducing overhead marketing costs

Apart from the above, as you have mentioned, it will reduce transportation time. Some researches suggest 60% of the transportation time is spent by trucks in just parking. Out of this only a fraction of the time is spent for necessary stops while a major portion is spent stopping in each state to pay the applicable transportation charges. GST will ensure there are no unnecessary stops for payment of such charges, thereby eliminating a major portion of the parking time in transportation.

Improvement in transportation time suggests another obvious benefit, i.e., reduced wastage of food grains. As most agricultural produce is perishable with a short shelf life, improved transportation time ensures higher availability, which in turn implies lower cost of such agricultural produce and higher availability.

Another important point to be noted is that presently states charge for transportation of agricultural produce too. Such costs will be eliminated for small farmers because they would fall below the threshold limit of GST, hence being exempt from any such charges.

Indirect impact on manufactured goods: Manufactured goods, especially those produced from agricultural products will also become cheaper due to lower cost of raw materials.

Article by : Sanhay Shiva Rama Krishnan

Charted Accountant

The post What is GST? Why is that Important? appeared first on Breaking News, Movies, News updates, 24*7 updates.

This post first appeared on Breaking News, Movies, News Updates, 24*7 Updates, please read the originial post: here

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What is GST? Why is that Important?


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