{"id":1768,"date":"2024-03-29T21:12:43","date_gmt":"2024-03-29T15:42:43","guid":{"rendered":"https:\/\/lotusarise.com\/qna\/?p=1768"},"modified":"2024-04-03T07:11:25","modified_gmt":"2024-04-03T01:41:25","slug":"q-what-is-are-the-most-likely-advantages-of-implementing-goods-and-services-tax-gst","status":"publish","type":"post","link":"https:\/\/lotusarise.com\/qna\/upsc\/q-what-is-are-the-most-likely-advantages-of-implementing-goods-and-services-tax-gst","title":{"rendered":"Q.\u00a0What is\/are the most likely advantages of implementing \u2018Goods and Services Tax (GST)\u2019?"},"content":{"rendered":"\n
    \n
  1. It will replace multiple taxes collected by multiple authorities and will thus create a single market in India.<\/li>\n\n\n\n
  2. It will drastically reduce<\/strong> the \u2018Current Account Deficit\u2019 of India and will enable it to increase its foreign exchange reserves.<\/li>\n\n\n\n
  3. It will enormously increase<\/strong> the growth and size of economy of India and will enable it to overtake China in the near future.<\/li>\n<\/ol>\n\n\n\n

    Select the correct answer using the code given below:<\/p>\n\n\n\n

      \n
    • 1 only<\/li>\n\n\n\n
    • 2 and 3 only<\/li>\n\n\n\n
    • 1 and 3 only<\/li>\n\n\n\n
    • 1, 2 and 3<\/li>\n<\/ul>\n\n\n\n
      \n

      Answer:<\/strong> (a) 1 only<\/strong><\/p>\n<\/blockquote>\n\n\n\n

      Goods and Services Tax (GST):<\/h5>\n\n\n\n
        \n
      • Goods and Services Tax (GST) was introduced by the Government of India to boost the economic growth of India<\/strong>. GST is considered to be the biggest taxation reform in the history of Indian economy.<\/li>\n\n\n\n
      • It was introduced to save time, cost and effort. Goods and Services Tax (GST) Act came into effect in 2017.<\/strong><\/li>\n\n\n\n
      • In order to address the complex system in India, the Government introduced\u00a03 types of GST which are given below.<\/strong>\n
          \n
        • CGST (Central Goods and Service Tax)<\/li>\n\n\n\n
        • SGST( State Goods and Service Tax)<\/li>\n\n\n\n
        • IGST(Integrated Goods and Services Tax)<\/li>\n<\/ul>\n<\/li>\n\n\n\n
        • As per 2016 GST regime, Union Territory Goods and Service Tax (UTGST) was also introduced to account for all the taxations in the Union Territories<\/strong> of India.<\/li>\n\n\n\n
        • The power to make any changes in the GST law is in the hands of GST Council. GST Council is headed by the Finance Minister<\/strong>.<\/li>\n<\/ul>\n\n\n\n
          Legislative Basis Of GST<\/h6>\n\n\n\n
            \n
          • In India, GST Bill was first introduced in 2014 as The Constitution (122nd Amendment) Bill.<\/li>\n\n\n\n
          • This\u00a0got an approval in 2016<\/strong>\u00a0and was renumbered in the statute by Rajya Sabha as The\u00a0Constitution (101st<\/sup> Amendment) Act, 2016<\/strong>. Its provisions:\n
              \n
            • Central GST to cover Excise duty, Service tax etc, State GST to cover VAT, luxury tax etc.<\/li>\n\n\n\n
            • Integrated GST to cover inter-state trade. IGST per se is not a tax but a system to coordinate state and union taxes.<\/li>\n\n\n\n
            • Article 246A \u2013<\/strong> States have power to tax goods and services.<\/li>\n<\/ul>\n<\/li>\n\n\n\n
            • GST Council<\/strong>\n
                \n
              • Article 279A \u2013 GST<\/strong> Council to be formed by the President to administer & govern GST. It\u2019s Chairman is Union Finance Minister of India with ministers nominated by the state governments as its members.<\/li>\n\n\n\n
              • The council is devised in such a way that the centre will have 1\/3rd<\/sup> voting power and the states have 2\/3rd<\/sup>.<\/li>\n\n\n\n
              • The decisions are taken by 3\/4th<\/sup> majority.<\/li>\n<\/ul>\n<\/li>\n\n\n\n
              • Reforms Brought About by GST<\/strong>\n
                  \n
                • Creation of common national market:<\/strong> By amalgamating a large number of Central and State taxes into a single tax.<\/li>\n\n\n\n
                • Mitigation of cascading effect:<\/strong> GST mitigated ill effects of cascading or double taxation in a major way and paved the way for a common national market.<\/li>\n\n\n\n
                • Reduction in Tax burden:<\/strong> From the consumers\u2019 point of view, the biggest advantage would be in terms of reduction in the overall tax burden on goods.<\/li>\n\n\n\n
                • Making Indian products more competitive:<\/strong> Introduction of GST is making Indian products more competitive in the domestic and international markets owing to the full neutralization of input taxes across the value chain of production.<\/li>\n\n\n\n
                • Easier to administer:<\/strong> Because of the transparent and self-policing character of GST, it would be easier to administer.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n
                  Main Features of GST<\/h6>\n\n\n\n
                    \n
                  • Applicable On supply side:<\/strong> GST is applicable on \u2018supply\u2019 of goods or services as against the old concept on the manufacture of goods or on sale of goods or on provision of services.<\/li>\n\n\n\n
                  • Destination based Taxation:<\/strong> GST is based on the principle of destination-based consumption taxation as against the present principle of origin-based taxation.<\/li>\n\n\n\n
                  • Dual GST:<\/strong>\u00a0It is a dual GST with the Centre and the States simultaneously levying tax on a common base. GST to be levied by the Centre is called Central GST (CGST) and that to be levied by the States is called State GST (SGST).\n
                      \n
                    • Import of goods or services would be treated as inter-state supplies and would be subject to Integrated Goods & Services Tax (IGST) in addition to the applicable customs duties.<\/li>\n<\/ul>\n<\/li>\n\n\n\n
                    • GST rates to be mutually decided:<\/strong> CGST, SGST & IGST are levied at rates to be mutually agreed upon by the Centre and the States. The rates are notified on the recommendation of the GST Council.<\/li>\n\n\n\n
                    • Multiple Rates:<\/strong> Initially GST was levied at four rates viz. 5%, 12%, 16% and 28%. The schedule or list of items that would fall under these multiple slabs are worked out by the GST council.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"

                      Select the correct answer using the code given below: Answer: (a) 1 only Goods and Services Tax (GST): Legislative Basis Of GST Main Features of GST<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_kad_blocks_custom_css":"","_kad_blocks_head_custom_js":"","_kad_blocks_body_custom_js":"","_kad_blocks_footer_custom_js":"","_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"_kad_post_classname":"","footnotes":""},"categories":[1,3],"tags":[38],"years":[56],"class_list":["post-1768","post","type-post","status-publish","format-standard","hentry","category-upsc","category-prelims","tag-indian-economy","years-56"],"acf":[],"taxonomy_info":{"category":[{"value":1,"label":"UPSC"},{"value":3,"label":"Prelims"}],"post_tag":[{"value":38,"label":"Indian Economy"}],"years":[{"value":56,"label":"2017"}]},"featured_image_src_large":false,"author_info":{"display_name":"LotusArise","author_link":"https:\/\/lotusarise.com\/qna\/author\/team-lotusarise"},"comment_info":0,"category_info":[{"term_id":1,"name":"UPSC","slug":"upsc","term_group":0,"term_taxonomy_id":1,"taxonomy":"category","description":"","parent":0,"count":1269,"filter":"raw","cat_ID":1,"category_count":1269,"category_description":"","cat_name":"UPSC","category_nicename":"upsc","category_parent":0},{"term_id":3,"name":"Prelims","slug":"prelims","term_group":0,"term_taxonomy_id":3,"taxonomy":"category","description":"","parent":1,"count":1251,"filter":"raw","cat_ID":3,"category_count":1251,"category_description":"","cat_name":"Prelims","category_nicename":"prelims","category_parent":1}],"tag_info":[{"term_id":38,"name":"Indian Economy","slug":"indian-economy","term_group":0,"term_taxonomy_id":38,"taxonomy":"post_tag","description":"","parent":0,"count":225,"filter":"raw"}],"_links":{"self":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/posts\/1768","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/comments?post=1768"}],"version-history":[{"count":0,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/posts\/1768\/revisions"}],"wp:attachment":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/media?parent=1768"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/categories?post=1768"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/tags?post=1768"},{"taxonomy":"years","embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/years?post=1768"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}