The Awaited Goods and Service Tax-Role in the growth of Business

A comprehensive indirect tax on Goods and Services which encapsulates charge on sale, manufacture and consumption of services and goods at the country-wide level. The intent of introduction of this single uniform tax is to consolidate almost all taxes falling under indirect tax regime into one single tax, substituting multiple taxes and taming the restraints and inefficiencies in the current structure of indirect tax.

The instigation of Central VAT (CENVAT) has eliminated the cascading thrust of “tax on tax” to a great expanse by bestowinga system of “set off” for amount of taxes already paid on input goods and services up to the point of production. Likewise, the instigation of VAT in all the States has eliminated the cascading sequel by providing setoff for the amount of taxes paid on input goods as well as amount of taxes paid on prior purchases. Yet, the twain the State VAT and the CENVAT have certain flaws. The instigation of GST will not only embrace more Central taxes under indirect tax umbrella and consolidate taxes on goods and services for set-off abatement, but also apprehend acknowledged value addition in the dispensation trade. With the introduction of GST, anunrelenting series of set-off from the indigenous manufacturer's/producer's location and service provider's location upto the retailer's position would be determined which would overcome the charge of all cascading thrusts, covering the substance of service tax and CENVAT. This is the quintessence of GST.

This paper has a technical background, covering all the developments happened in the India for the introduction of this law i.e. amendment in the Constitution of India, proposed administrative changes and compliance requirements.

This paper accounts for all major events happened in India from the day this law was proposed in the parliament to the date.

Finally, conclusions are drawn regarding its effect on the Indian economy.