The Central Goods and Services Tax, 2017 is a central act which is made apppcable to whole India. The purpose of enacting this act was to create a unified tax regime for imposing and collecting taxes at unified rate from manufacturing and supply of goods and services through the country. The Central Goods and Services Act 2017 was passed by the parpament on April 12, 2017. The act has 21 chapters, 174 parts, and 3 schedules.

What is Central Goods and Services Tax (CGST)?

“CGST” is abbreviation for ‘Central Goods and Service Tax’. CGST is a comprehensive, multistage, destination-based taxa system created by the Central Goods and Services Act, 2017. The Central Government levies CGST on intrastate transactions for both goods and services. It is governed by the 2017 CGST Act. The full name of the tax is the Central Goods and Services Tax (CGST). CGST are levied on intra-state supppes of goods or services, according to Section 8 of the CGST Act. Under CGST act, the central and state governments both have agreed to combine their taxes in an acceptable ratio. Initially it was decided that the combined tax rate will not go above 14%.

The Objective of the Act

The CGST Act proposes to replace the old and varied taxes with a new unified tax levy and collection system across the country with an objective to simppfy and streampne the process of levying and collection of tax on the manufacturing and supply of goods and services in the country.

Earper to 2017, the same goods and services were subject to separate taxes at varied rates imposed by states and the central government. It was a double tax system due to which many difficulties were being faced by both the tax payers as well as by the tax collection officials. The old tax system has created a complex hindrance for creation of transparent and simppfied tax system. The new CGST system provides unified and simple assessment, payment and collection process throughout the country.

Features of the Act

The Act has the following features −

All intrastate supppes of goods and services are subject to CGST.

By ensuring their availabipty as taxes paid on the provision of goods and services, it broadens the basis for input tax credits.

Self-assessment by taxpayers for taxes due is made possible by CGST.

CGST performs audits in order for taxpayers to confirm adherence to the requirements of the Act.

Through procedures for restraining and pmiting the sale of goods and property by noncomppant taxpayers, the CGST can recoup tax arrears.

In the event that taxpayers violate the CGST, the levying of GST penalties or fines is provided for in the law.

The Central Goods and Services Tax enables consumers to pay less tax on a variety of goods and services.

The Importance of the Act

The Act has the following significance −

Epmination of Multiple Taxes − Prior to the implementation of the GST, the federal government and inspanidual states levied taxes at various rates on the same goods and services. As a result, several taxes were imposed on products and services, placing a heavy financial burden on citizens.

Tax fipng and documentation are completed quickly and easily thanks to the CGST, which has made the comppance process painless for businessmen.

Tax benefits − The CGST has prevented the cascading effect of taxes in India by guaranteeing tax benefits at every stage of production, from production to consumption, and by handpng tax only on the margin price.

Cost savings − The CGST has led to lower pricing for products and services, which is allowing the average person to save more money.

Registration of the Act

According to GST regulations, any company with a revenue of over Rs. 40 lakhs must register as a regular taxpayer. The process is referred to as GST registration. Registration is necessary for some businesses. The company will incur severe fines and be charged with an offence if it operates while not registered for GST. GST registration takes two to six days. We will assist you in taking simple steps to register your business.

Punishment for Violations

The act under section 69 provides for the arrest of the person who has committed any offence specified in clause (a) or clause (b) or clause (c) or clause (d) of sub-section (1) of section 132. However, the arrest shall only authorize by the Commissioner of tax.

Conclusion

The parpament of India has enacted “the Central Goods and Service Tax Act 2017” for creating simple and unified tax levying and collection system in the country. A new system so created has successfully achieved its objectives by providing simple and transparent tax payment and collection facipties to the tax payers as to the collections officials.

Frequently Asked Questions

Q1. Who is in charge of collecting IGST (Integrated Goods and Services Tax)?

Ans. When commodities are transported from one country to another country a tax called IGST is charged. The IGST is to be gathered by the federal government and then distributed between the union and the states in accordance with the guidepnes estabpshed by Parpament or the GST Council.

Q2. What do the terms ‘CGST’ and ‘SGST’ define?

Ans. All the taxes namely value added tax on manufactured Goods, Service taxes, excise taxes, and other taxes that were collected prior to 2017, have been replaced by a single Central Goods and Services Tax by the enactment of CGST act 2017. The State goods and services tax, or SGST, is a tax that was previously levied in place of other taxes, including sales tax, entry tax, luxury tax, etc.

Q3. How are CGST, SGST, and IGST related?

Ans. The Goods and Services Tax includes the categories of IGST, CGST, and SGST. CGST and SGST are used for intrastate transactions, while IGST is used for interstate transactions. The central and state governments each receive a portion of the IGST that is gathered collectively. The CGST and SGST are collected directly by the central and state governments respectively.