PS Ramamoorthy, B.Com LLB (Hons), Sastra Law School, Tanjore
ABSTRACT
The Goods and Services Tax (GST) is a comprehensive indirect tax system that has revolutionized the taxation structure in many countries, including India. One of the fundamental aspects of GST is the charge and collection mechanism, which governs how taxes are levied and collected throughout the supply chain. The charge mechanism under GST involves determining when and on what transactions the tax liability arises. Unlike the traditional tax system, GST follows a destination-based consumption tax, where the tax is levied at each stage of the supply chain. The charge is primarily based on the concept of the "supply" of goods or services, encompassing all forms of supply, such as sale, transfer, barter, exchange, license, rental, lease, and importation. GST operates on a dual model, where both the Central and State governments have the authority to levy and collect taxes. This dual structure ensures a seamless flow of credit and revenue sharing between the Central and State governments. The collection mechanism under GST is facilitated through a robust and technology- driven platform. Businesses are required to register under GST, and the tax is collected through a process of self-assessment. Input tax credit is a key feature that allows businesses to claim credit for taxes paid on inputs, thereby avoiding cascading effects and ensuring the fair taxation of value addition at each stage of the supply chain. To streamline the collection process and enhance compliance, GST relies heavily on technology, with the Goods and Services Tax Network (GSTN) serving as the IT backbone. The GSTN facilitates online registration, return filing, and payment of taxes, contributing to transparency, efficiency, and ease of doing business. This paper provides a concise overview of the charge and collection mechanism under GST, emphasizing the shift from a traditional tax system to a destination-based consumption tax that promotes efficiency, transparency, and uniformity in the taxation of goods and services.
Keywords: Dual Mechanism, Supply Chain, Collection mechanism, uniformity.
Comentarios