The Goods and Services Tax (GST), certainly being a favorite to become India’s biggest tax reform since Independence, was rolled out on 1st of July 2017, conceived on the principle of ‘one nation, one tax, one market’, promising to be an effective tax system that subsumes 17 central and state levies. The movement of goods had now become much simpler across the country and cheaper as the new regime had replaced the old system, where a product was taxed multiple times and at different GST rates.
The GST full form is simply Goods and Service Tax. But one needs to learn about the terms Short title, extent and commencement which gives the base to the pillar “GST”
|Short Title||All Acts enacted by the Parliament since the introduction of the Indian Short Titles Act, 1897 carry a long and a short title. The long title (Goods and Services Tax) , set out at the head of a statute, gives a fairly full description of the general purpose of the Act and broadly covers the scope of the Act.
The short title (GST) , serves simply as an ease of reference and is considered a statutory nickname to obviate the necessity of referring to the Act under its full and descriptive title. Its object is identification, and not description, of the purpose of the Act.
|Extent||Part I of the Constitution of India states: “India, that is Bharat, shall be a Union of States”. It provides that territory of India shall comprise the States and the Union Territories specified in the First Schedule of the Constitution of India. The First Schedule provides for twenty-nine (29) States and seven (7) Union Territories.
Part VI of the Constitution of India provides that for every State, there shall be a Legislature, this when read in context of GST gives us the reason as why we have SGST Act and CGST /UGST Act in the GST system. Whereas Part VIII provides that every Union Territory shall be administered by the President through an ‘Administrator’ appointed by him. However, the Union Territories of Delhi and Puducherry have been provided with Legislatures with powers and functions as required for their administration.
India is a summation of three categories of territories namely – (i) States (29); (ii) Union Territories with Legislature (2); and (iii) Union Territories without Legislature (5).
|Commencement||The CGST Act came into operation on 01.07.2017, the date appointed by the Central
Full form of GST : As we know, the GST full form is Goods and Service Tax. However the history about GST dates back to year 2009 wherein, the GST bill a tax reform or tax structure which was proposed to unify various forms of indirect taxes into one single indirect tax for the whole nation, and a tax which will make India a unified common market, was introduced in Lok Sasha back in 2009 by erstwhile UPA government and was failed to be get passed under bother the houses of the Parliament. But it was the current NDA government which introduced a ‘slightly modified’ version of the GST Bill in the Parliament and it was passed by both the Houses with majority.
Why birth of GST : Just as the birth of Jesus Christ had a purpose, the birth of GST has also its own purpose. Prior to GST we had a complicated structure of Indirect taxes such as Central Excise, Service Tax, State Vat, Entertainment Tax, Central Sales Tax, Octroi Duty and many more. Wherein if I am a manufacturer I had to comply with Central Excise Act for production made by me and when after production I moved to sell the goods I had to comply with my State VAT law for sales to be made by me. Having to do paper works and that too manually for Excise and State VAT authorities. And also I had some restrictions on claiming of input tax credits on my capital goods purchased by me for my manufacturing entity wherein I was allowed under the law to claim Input taxes on capital goods on installment basis for Ex : first 50% in the year of installment of machinery rest 50% in subsequent year which was not fair as the tax amount paid by me should entitle me to take credit in the year of purchase itself thus the flow of credits was blocked by law for me.
But when I move towards GST I see, One tax which has eaten all the other taxes which were worrying me a lot like paper returns, too many compliances, blockage in tax credits. I also see a technology-driven platform which enables seamless flow of information which completes the return particulars of other party to a supply when the first party to the supply prepares his return for supplies made by him. This also makes sure that the input tax credit doesn’t has any blockages in its flow, and even if some blockages comes up such as the supplier not filed his return the same gets reported/displayed for the receiver in the return GSTR2A such a technology/mechanism was absent in previous taxation laws. Now, I can maintain my personal wallet safely secured in GST Network. Where in my tax liability(payables) get transferred to my E Liability ledger which then gets debited/settled from my Input tax Credit wallet (E Credit Ledger) and if my wallet balance from Credit ledger is insufficient to settle up the liability ledger then I have an another wallet in which I can pay and maintain cash (E Cash ledger) to settle the balance of my liability. These facilities were absent too in previous taxation law. Certainly the birth of GST is been a good news for all those who want to prosper along with the nation. And it would be a Villanova for those who want self growth by even going to extent of bribery, generating black money, indulging in money laundering activities. I personally feel the right pulse with GST and I also live its statutory nickname “GST” not because it rhymes good but because it feels strong it gives a good vibe that finally the country has got the right form of tax structure which was needed to remove the hardships for government and taxpayers as well.
Conclusion: To recall again that GST is the full form for Goods and Service Tax where the elaborate title is the head of the statute giving out fair and detail description of general purpose of the Act. And GST (the short title) is the statutory nickname to easily associate with the Act or to easily identify the Act. Being an accountant I easily associate myself with Tally.ERP 9 because it’s user friendly, GST ready, a genie which does all your GST Compliance works from GST Registration to Return filing and the recently added law on Eway bill law where Tally.ERP 9 even generate waybill for you. If I had to nickname Tally.ERP 9, I would nickname it as “ Accountants friend” because Journalising entries with Tally.ERP 9 is just too easy and it could be understood even by a persons from non commerce background with ease.
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