2021-06-15 18:00:02
Goods and Services Tax (GST) is an
indirect, comprehensive, multi-stage, destination- based tax that is levied on every
value addition.
The Goods and Service Tax Act was passed in the Parliament in March 2017. The Act came into effect on 1st July 2017.
At the Central level, the following taxes have been subsumed in the GST: Central Excise Duty
Additional Excise Duty
Service Tax
Countervailing Duty
Special Additional Duty of Customs
At the
State level, the following taxes have been subsumed in the GST:
State Value Added Tax/Sales Tax,
Entertainment Tax (other than the tax levied by the local bodies), Central Sales Tax (levied by the Centre and collected by the States)
Octroi and Entry tax
Purchase Tax
Luxury tax
Taxes on lottery, betting and gambling
Revenue implications of GST since July 2017: GST was introduced in July 2017. After the initial transitional issues following the roll-out of GST, revenue collection picked up from an annual average of 89.8 thousand crores in 2017-18 to 98.1 thousand crores in 2018-19.
However in 2018-19, indirect taxes have fallen short of budget estimates by about 16 per cent, following a shortfall in GST revenues (including CGST, IGST and compensation cess) as compared to the budget estimates. Indirect taxes have fallen by 0.4 percentage points of GDP primarily due to shortfall in GST collections.
According to the Economic Survey, though there has been an improvement in tax to GDP ratio over the last six years, gross tax revenues as a proportion of GDP has declined by 0.3 percentage points in 2018-19 over 2017-18.
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