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GST Day 2022: Know the significance of the new taxation system
The GST day is observed on July 1 to mark the Goods and Services Tax implementation. The new indirect tax system came into force on July 1, 2017, after being launched in a ceremony held in parliament on the midnight of June 30.
The GST Day was first celebrated on July 1, 2018, to mark the first anniversary of the new tax regime.
GST significance
The introduction of the GST marked an unprecedented reform in the Indian taxation system. With its implementation, the government aimed to replace the multi-layered and complex indirect tax structure with a new, transparent, simple, and technology-driven tax regime.
There are four types of GST – Central Goods and Services Tax (CGST), State Goods and Services Tax (SGST), Union Territory Goods and Services Tax (UTGST), and Integrated Goods and Services Tax (IGST).
The taxation system was inducted to break the barriers in inter-state trade and commerce and integrate India into a single, common market. It is in line with the Make in India campaign and aims at achieving the goal of One Nation, One Tax, and One Market. The objective of implementing GST is to enhance the ease of doing business in the country and reduce transaction costs by eliminating the old form of taxes.
Background
The idea of GST was first proposed in 2006 by the then Union Finance Minister P. Chidambaram in his budget speech for 2006-2007. Initially, GST was slated to be introduced on April 1, 2010, but eventually got implemented in 2017.
It was implemented through an amendment to the constitution of India. The Constitutional (122nd Amendment) Bill (CAB) was introduced in the parliament and passed by the Lok Sabha and the Rajya Sabha. After receiving permission from the president, the bill was enacted as the 101st Constitution Amendment Act, 2016.
A Goods and Services Tax Council (GSTC) was also set up to recommend the Union and the States on issues related to GST.
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