Ravi Kumar Sharma

Roll. No. BM-09169

PGDM-2009-11
Section-C
GST ( Goods and Service Tax) is a tax
on consumption. Every time a
consumer buys a good or service, it
attracts a tax that is included in the
price. This indirect tax which is
collected by personal selling the good
or service, is deposited with the
government.
The UPA has secured mandate on the common man’s aspirations and therefore
it has to deliver accordingly. The rural development and welfare schemes require
huge revenue. The pertinent question is: from where will money come without
enhancing the existing tax burden? The government has already hinted at more
relief in direct tax; thus challenge before the government would be of immense
magnitude. The government can generate additional revenues from indirect
taxes without enhancing the existing tariff. The fact of the matter is that indirect
tax is one area where very fewer reforms have been made over a couple of
decades. Kelkar, chairman of the 13th Finance Commission has evolved an
excellent and modern indirect tax regime known as GST (goods and service tax),
which, if all goes well would be made operational from April 1, 2010.
Government now likely adopt the policy to imposed such a tax
structure that doesn’t burden the consumers shoulders
directly. All the indirect taxes like VAT,service tax,CESS etc.
are ended off and a common tax structure i.e. GST is imposed.
In GST center and state government divided the tax amount
into two stages. First central government collects tax and then
state government. In this way time and amount spend on
collection of tax which is sometimes exceeds the net tax
collection in present structure is demolished. The removal of
multiple taxes on goods at different levels would in a long run
help increase the overall amount of tax collection.