GST means Goods and Services Tax. The main aim of GST is to abolish all types of indirect taxes and adopt a single taxation system that is GST. GST is a tax on goods and services under which every person is liable to pay tax on his output and is entitled to get input tax credit (ITC) on the tax paid on its inputs (therefore a tax on value addition only)and ultimately the final consumer shall bear the tax. In the present system multiplicity of tax system is available. For example Central taxes such as excise duty, service tax and countervailing duty, and State taxes, such as VAT, entertainment tax and luxury tax are levied on the products. GST will eliminate these multiple taxes and bring uniformity of taxes all over the country. This will surely prove beneficial in simplifying the tax system. As there will a single tax system. Indian market will convert into a unified market. This results in lowering business costs and also facilitates free flow of goods from one state to another. This will also reduce the transaction cost of business. The difference of taxes in different states divides the National Market along the state boundaries. GST will be levied only at the final destination of consumption based on VAT principle. GST is likely to eliminate these state boundaries and make the market as one unified National Market with a simple levy and lowering effective tax on goods. According to analysts GST could boost India's economic growth by up to 2 percentage points. As per the experts GST will provide a gain of $15 billion a year to India. They have the given logic behind it that GST will promote more exports; increase in exports will generate more employment opportunities and all this boost the overall growth of the country. The present research work has been done with the objectives to understand the meaning of GST, to discuss the worldwide applicability of GST, to explain the benefits of GST implementation, to understand the mechanism of GST application in India and to discuss the challenges in GST implementation. It is based on secondary data as the data been collected through internet and other published sources. The paper ends with the conclusion that although there are lots of challenges in implementation of GST in India but the benefits which will be received after implementing it properly will outweigh its cost. Hence it should be implemented in its full-spirit as early as possible.
GST, Taxes, VAT, States, SGST and CGST and System
