GST is an indirect tax imposed on goods and services with the aim of “one tax for all”.
Have you noticed the bill when you last visited a restaurant? Or in the bill you received after shopping? You will find an additional charge by the name GST. Do you know what this is? And why it is applied? This is a tax that we all have to pay to the government. Tax can be direct or indirect. You have heard about the different tax systems and GST is a new entry in this list. Let us explore GST in detail.
Short and Long GST Essay in English
Here, I’m providing short and long essays on GST. This topic is useful for students of classes 4, 5, 6, 7, 8, 9, 10, 11, 12, etc. This topic is also useful for students preparing for competitive exams.
GST Essay 10 Lines (100 - 150 Words)
1) GST is a newer tax system adopted in India on 1st April 2017.
2) All the earlier indirect taxes are now replaced by GST.
3) GST was first adopted by France, later many countries joined it.
4) GST is a good system to avoid corruption in the tax regime.
5) 0%, 5%, 12%, 18%, and 28% are the five slabs of GST.
6) All the services and goods fall in the different GST slabs.
7) CGST, SGST, and IGST are the three types of GST in India.
8) GST is paid by the final consumer of the goods.
9) GST is a completely online process and hence easy to adopt.
10) The state government may suffer losses due to GST.
Short Essay on GST (200 - 250 Words)
GST or Goods and Service Tax is a new tax system replacing all the earlier complicated indirect taxes like VAT (value added tax), purchase tax, luxury tax, etc. It is one tax for all. In 1954, France was the first country to adopt GST. Later many countries have implemented GST and today nearly 160 countries have adopted GST. In India, it was adopted under the tenure of Prime Minister Narendra Modi.
GST is a more transparent method that is beneficial for customers. Customers will now have to pay the same price for the product all over the country. In the previous system of tax-paying, customers have to pay taxes on many levels but the introduction of GST removed multiple taxes paying systems. GST is monitored by the GST council which consists of Union Minister and Finance Minister of states.
There are four main types of GST:
- CGST or Central GST
- SGST or State GST
- IGST or Integrated GST
The central government is responsible for collecting CGST, while SGST is collected by the state. The IGST is collected by the central government on inter-state supplies. GST is imposed in five slabs, 0%, 5%, 12%, 18%, and 28%. Goods like cement, tobacco, etc fall under 28% while goods like bread and butter fall under 0% which is free from GST. Taxes on Alcohol, electricity, and petroleum are still collected according to the old tax system.
Long Essay on GST (500 - 600 Words)
All the citizen of the nation has to pay some taxes to the government in one or another form. Collecting taxes is important for the economy of the country. These taxes are used by the government for the public interest and national debts. The taxes can be applied on income, transactions, business, or sales profit. One of the replacements for all the earlier taxes is GST which is Goods and Service Tax.
What is GST?
GST is an indirect tax applied on all the goods and services. It is collected on a national level from sale, manufacture, consumption of products, transactions, etc. GST is paid by the final consumer of the goods and services. GST is collected at every level of production and distribution of goods. However, the rate depends on the value added at every stage. GST implies a single tax system all across the country so that consumers have not to pay taxes multiple times. GST is imposed on businesses and sales that fall above the given threshold value. GST is categorized into five slabs and the tax on the products and services is collected accordingly. It is introduced to simplify the tax system in India.
History of GST in India
The idea of GST was not a new concept in India. In 1999, the then Prime Minister, Atal Bihari Vajpayee suggested the idea of implementing GST. A committee was also set up by him for this purpose. In 2006-07, the then Union Finance Minister of India again projected the idea of GST in the budget speech. It was aimed that GST will be applicable from 1 April 2010. But due to political disagreement the date was postponed.
The GST bill was passed by Lok Sabha on 29 March 2017. Till 30th June, all the states and union territories passed their respective GST bills. Therefore, 1st July 2017 was considered the adoption day of GST in India. The GST applied in India follows the Canadian model. The GST bill in the Indian parliament was supported by 336 votes while 11 votes were against it. Assam in India became the first state to adopt the GST in the country.
Benefits of GST
There are many benefits of implementing GST. The major advantage is that GST removes several underlying indirect taxes in India. It is also beneficial for small traders. Earlier they had to pay VAT if their turnover is more than 5,00,000 but under GST, the tax will be applied on a turnover of more than 20,00,000. The entire online method of GST made it easier and free from complicated rounds of tax paying. The tax structure plan of GST also gives an option to reduce the tax to the users.
Drawbacks of GST
In some cases, GST is beneficial for the country but it also poses some disadvantages. The main benefit of GST is mainly enjoyed by the Centre, the state may suffer losses. Since there is no separate tax for the state, their earnings can be cut off. Many items are under GST that was earlier free from taxes. Since GST is a completely online process, it can create difficulties for small business operators. However, GST is also responsible for increasing the cost of operations.
For many people, GST is not completely fruitful for the country while many support it. GST promises transparency and benefits as it is designed by keeping in mind both consumers and businesses. Although it is good from the previous tax system but still has some insufficiency.
I hope the above provided essay on GST will be helpful in knowing various aspects of this tax system.
FAQs: Frequently Asked Questions on GST
Ans. GST can be calculated as:
GST = (Actual cost x GST percentage)/100.
Therefore, the final price will be (Actual cost + GST amount)
Ans. The United States does not implement GST.
Ans. In a GST council, 2 members are from the Centre and 28 from states, and 3 from Union Territories. In total the council consists of 33 members.
Ans. GSTIN stands for Goods and Service Tax Identification Number. It is a unique number given to every business when registered to GST.