Category All About Money

Earlier, there were multiple taxes levied both at the central and the State level which often confused the taxpayers.

India's gross GST revenues was the highest-ever in April at ?1,87,035 crore. It is 12% higher than the same month last year, which was the previous highest tax tally of ?1.67 lakh crore.

Let us know more about GST that simplified our tax regime.

Origin

The concept of GST was introduced in the Budget speech on February 28, 2006. Though initially it was proposed that GST would be introduced on April 1, 2010, GST was introduced on July 1, 2017, under the 'one nation, one tax initiative. Its aim was to bring different types of taxes under a single-tax system.

To implement GST, Constitutional (122nd Amendment) Bill was passed by Rajya Sabha on August 3, 2016. The Prime Minister Narendra Modi-led Cabinet approved setting up of GST Council on September 12, 2016. The 49th GST Council meeting took place on February 18, 2023 in New Delhi.

What is GST?

The Goods and Services Tax (GST) is levied on the supply of goods and services, which is paid by the consumer. It is imposed in the State where the goods and services are consumed and not where they are manufactured.

However, some goods and services are exempted from GST and are subjected to a State's existing taxes such as the Value Added Tax (VAT), which is paid at every stage of value addition in the supply chain. These levies are paid at each stage of the production process by the consumer.

As the GST is a destination-based tax there are various types of GST-CGST (levied by the Centre), SGST (levied by the State), UTGST (by the Union Territory), and IGST (levied for the interstate supply of goods by the Centre).

Benefits

Earlier, there were multiple taxes levied both at the central and the state level which often confused the taxpayers. The introduction of GST has eased the manufacturer's job of compiling different taxes into one. Besides, it has brought India at par with the global market by following a universally accepted tax regime. With the implementation of IGST, the manufacturers no longer have to pay CST (Central Sales Tax) and other taxes.

Difference between GSTN and GSTIN

GSTN (Goods and Services Tax Network) is a platform that manages the IT system of the GST portal. It is used by the government to track financial transactions and other tax informations. Meanwhile, GSTIN is a 15-digit tax registration number that is provided to manufacturers, traders, stockists, wholesalers, and retailers.

FORMAT OF GSTIN

*First two digits of GSTIN is the State code

*The next 10 digits denote the PAN or Permanent Account Number of business entity/proprietor

* The 13th digit is based on the number of registrations done by the business entity within a State

*14th digit is "Z" by default

* The last digit is the check code, which can be a number or a letter.

Picture Credit : Google

You must have read the comments by the International Monetary Fund (IMF) on the global economic environment. But have you wondered what it is?

IMF, a United Nations specialised agency, was created to secure international monetary cooperation, stabilise currency exchange rates, and expand international liquidity, which means getting access to hard currencies. Its headquarters is in Washington D.C.

Origin

The first half of the 20th Century saw two world wars that caused enormous impact on European economy and a Great Depression that brought economic devastation in both Europe and the U.S. These events led to the need for a new international monetary system while preserving each country’s ability to pursue independent economic policies.

In July 1944, the UN Monetary and Financial Conference was held in Bretton Woods, New Hampshire, the U.S. There delegates from 44 countries drafted the Articles of Agreement for a proposed International Monetary Fund that would supervise the new international monetary system.

After ratification by 29 countries, the Articles of Agreement entered into force on December 27, 1945.

The first meeting at the IMF headquarters was held in May 1946 and its financial operations began the following year.

Organisation

The IMF is headed by a board of governors and accountable to its 190 member-countries. The governors, who are usually their countries’ finance ministers or central bank directors, attend annual meetings on IMF issues. The day-to-day work is overseen by its 24-member Executive Board who meet at least three times a week. The Managing Director is the head of the IMF staff and Chair of the Executive Board. S/he is assisted by four Deputy Managing Directors. Kristalina Georgieva is the current Chairperson of the organisation.

Role

The IMF has three critical goals: furthering international monetary cooperation, encouraging the expansion of trade and economic growth, and discouraging policies that would harm prosperity.

One of its roles is to provide loans, including emergency loans, to member countries facing actual or potential balance of payments problems. It is to help the countries rebuild their international reserves, stabilise currencies, continue paying for imports, and restore conditions for economic growth, while correcting underlying problems.

It also monitors international monetary system and global economic developments to identify risks and recommend policies for growth and financial stability.

It provides technical assistance and training to governments, central banks, finance ministries, revenue administrations, and financial sector supervisory agencies. These training help countries tackle cross-cutting issues such as income inequality.

Picture Credit : Google